Ires chief executive favours ‘simple' rent-cap increase under Government review

Irish Times

02-05-2025

The chief executive of
Ires Reit
, the largest private apartments owner in the State, has called for a simple increase to the current rent cap in housing pressure zones, in order to encourage investors and developers back into this area of the housing market.
Speaking in an interview with this news organisation, Eddie Byrne, who has led Ires for the past year, said a so-called reference rent system, as proposed by the Housing Commission last year, would be too complicated to set up and further delay a much-needed reboot of
private rental sector
(PRS) development.
A reference rent regime would link rates to local properties of a similar standard.
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The
Department of Housing
confirmed that it has received a copy of a report it requested from the
Housing Agency
on the current rent pressure zones regime in advance of the expiry of legislation underpinning the system at the end of this year.
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Minister for Housing James Browne
'will be considering it before bringing proposals to Government in due course as appropriate', it said in an emailed response to questions.
Rent pressure zones were introduced in late 2016 and were designed to cap rent increases in areas where there is high demand for housing and rental homes. An initial annual rent cap of 4 per cent was reduced to 2 per cent, or the rate of inflation, whichever is lower, in mid-2021.
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Taoiseach Micheál Martin signalled in February that the current system may be changed, or even removed, as current legislation underpinning it expires at the end of 2025.
'What does a reference-rate system actually mean in practice? I heard the chairman of the Housing Commission [John O'Connor] say recently that it would take two years or more to come up with a system of reference rents,' said Mr Byrne. 'You have reference rent regimes in other parts of Europe, but, as I understand them, they are really, really complicated.'
Asked whether he would favour a return of the initial 4 per cent annual limit, he replied: 'What I will say is, when it was at that level, there was investment in apartment building. Of course, interest rates were also lower at the time. But if you consider that pension funds are typically the types of investors that are ultimately behind PRS, an asset generating 4 per cent growth per annum is appealing.'
Mr Byrne said that Ires is happy to operate with rent pressure zones. 'But it needs to balance resident and tenant protections with the need to encourage investment. If you don't have that balance – and we don't have it today – you can see what that does to supply,' he said.
In recent years, Approved Housing Bodies and
the Land Development Agency
(LDA) have stepped in to address part of the gap in apartment building. However, they are focused on social and affordable accommodation.
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LDA chief executive
John Coleman said in a recent interview with The Irish Times
that there had been a 'market failure' as mainly overseas money that had previously flooded into the private rental sector largely evaporated since 2021.