By Sola Adeniji| M10News | June 9, 2025
Ireland’s average monthly rent has exceeded €2,000 for the first time, according to new figures from Daft.ie, intensifying scrutiny of the government’s rent cap policies amid a worsening housing shortage.
The average national rent now stands at €2,053, a 3.4% increase in the first quarter of 2025. That’s 48% higher than pre-pandemic levels and 168% above 2011 figures, making it the steepest rental inflation in modern Irish history.
Economists warn that the current system of rent controls may be contributing to the crisis by stifling supply and trapping tenants in long-term leases with below-market rates.
“Rent controls have made supply worse,” said Dr Ronan Lyons, economist at Trinity College Dublin and author of the report. “They deter new investment and are prompting smaller landlords to leave the market entirely.”
Supply Hits Record Lows
Rental supply remains critically low. As of 1 May, just over 2,300 homes were available to rent across the country — a 14% drop from the same time last year, and the third-lowest figure for May in more than two decades.
Rents continue to surge outside Dublin, where competition for limited stock is even tighter:
- Limerick: +20.4% year-on-year (€2,405 average)
- Cork: +13.6% (€2,213)
- Galway: +12.6% (€2,304)
- Dublin: +5.8% (€2,540)
Letting agents report a stagnant market where few tenants are moving, few properties are being listed, and affordability is sharply deteriorating for new entrants.
System Creating “Lock-In” Market
Under current rules, annual rent increases in Rent Pressure Zones (RPZs) are capped at 2% or the rate of general inflation, whichever is lower — but this applies only to existing tenancies.
This has created a two-speed rental system:
- Long-term tenants benefit from low, capped rents.
- New tenants face record-high asking prices.
Housing experts say the policy has unintentionally discouraged tenants from moving, contributing to a so-called “lock-in effect” and further shrinking available supply.
“It’s a gridlocked market,” said a Dublin-based letting agent. “No one moves, landlords aren’t reinvesting, and new renters can’t afford what’s left.”
Institutional Investors Gain Ground
Analysts say institutional landlords are emerging as the quiet beneficiaries of rent regulations. By setting initial rents high and then benefiting from capped increases, larger firms can maximise returns while facing less turnover.
Smaller, independent landlords are leaving the sector in growing numbers. According to a 2024 Oireachtas briefing, more than 20,000 private landlords have deregistered with the Residential Tenancies Board (RTB) since 2018.
Political Debate Intensifies
The government has defended the RPZ framework as a necessary protection for renters, but Housing Minister Darragh O’Brien has suggested future changes may include greater pricing flexibility for new leases.
Opposition parties have warned against weakening protections. Sinn Féin and Labour argue any move to liberalise rents could spark another surge in prices, pushing housing even further out of reach.
Housing charity Threshold said the real issue is the lack of new housing.
“We’ve underbuilt for a decade,” a spokesperson told M10News. “Rent caps are only part of the equation. Without more supply, we’re just managing the symptoms.”
Outlook Uncertain
With rents at historic highs and supply scraping historic lows, Ireland’s housing crisis shows no sign of easing. A major housing strategy review is due later this year, with pressure mounting on the government to rethink the role of rent controls in a distorted market.
Whether the current system is reformed — or replaced entirely — may now be a central question for the next phase of housing policy.
RTB Figures Reveal Shift in Landlord Base
The Residential Tenancies Board (RTB), which oversees tenancy registrations and disputes, has recorded a significant shift in the makeup of Ireland’s rental sector.
According to RTB data, over 20,000 private landlords have left the market since 2018, many citing unsustainable regulatory pressure and poor yields.
While the RTB provides dispute resolution, tenancy registration, and oversight of Rent Pressure Zones, experts argue its role is becoming more reactive than preventive — tracking market exits and disputes after the damage has already occurred.
Full data and tenant guidance are available at RTB.ie
M10News | Housing & Social Affairs
Reporting by Dayo Olusola. Edited by Newsroom Desk.
