HOUSING Minister James Browne has no idea when Ireland’s sky high rent prices will start to fall – despite introducing a slew of major reforms to rental rules for tenants and landlords.
The average rent across the country has climbed to over €2,000 per month.
At the same time, the number of new apartments to rent being built has collapsed in Ireland in recent years.
Today the Government announced a series of changes for the rental sector in a bid to attract international investment into the housing market and improve protections for renters.
Currently, rent pressure zone rules mean landlords in designated areas of the country can only raise their rent by two per cent per year.
However, there are a series of problems with this system with rents regularly climbing above this two per cent cap.
The Government claims that this cap is also a deterrent for international investment funds who fear that it will reduce their potential profitability if they invest in the sector.
Today, Housing Minister James Browne announced four key changes to the rental sector.
Firstly, the two per cent rent pressure zone cap will now be extended to the entire country for people currently living in existing rental properties.
However, this cap will not apply to newly built apartments.
Instead, landlords who own newly built apartments will be able to increase their rent every year in line with inflation.
The third change will see new six year terms introduced for renters from next year with landlords able to “reset” their rent to market value at the end of each six year term.
CHANGE TO RULES
The final change will see “no fault evictions” outlawed for large landlords who own more than three properties.
This means these landlords cannot boot out tenants where there has been no breach of the rental agreement.
Minister Browne said that the only way to bring down rent prices in Ireland was to increase supply.
The Fianna Fail TD said international investment funds were key to increasing the supply of apartments because the Government funding is focusing on building houses.
Asked directly if he believes the price of rent in Ireland will fall over the next two years on the back of his new changes, Minister Browne said: “I expect rents to fall over time. What that particular length of time is I wouldn’t be able to predict.”
The launch of the new rules caused significant confusion in the Dail with a series of questions over when landlords will be able to reset their rents to market value.
‘SACRIFICIAL LAMB’
Ironically, Minister Browne told the media that the changes were being introduced to “simplify” rental rules.
Sinn Fein leader Mary Lou McDonald took aim at the decision to enable landlords to reset their rents to market value when a tenant voluntarily leaves their property.
She said: “Under the government’s proposals, as one renter walks out the door, they will be replaced by another whose rent will have ballooned.”
Social Democrat TD Rory Hearne claimed that the ability for landlords to reset their rents every six years is leaving renters as the sacrificial lamb for investment funds.
Taoiseach Micheal Martin defended the policy reform and claimed that there will be no changes for any current renters.
