Property market is cheerier as supply of new rentals is on the rise
Renters are glad to see a modest increase in supply following the change in legislation that ended rent controls earlier this year.
“I do feel that the supply is coming back. It’s coming back a little bit – not necessarily because of new landlords… more from the purchase of new homes. The one thing that was good about the RPZs was that they did give people a chance to save. We’ve found that a lot of our younger tenants who have been renting for nine or ten years have moved on and bought a new home.
“For the first time in years, there is more supply now,” says Mark Rose, managing director of Rose Property Services. “There’s a noticeable feel of more supply in the rental market. That’s something we haven’t been able to say for a number of years. In fact, now in Cork, you have to work that bit harder to shift those properties.
“Before, you would have had less houses and a few hundred more being paid in rent. Now I would say that you have a bit more supply and, in some cases, rents area slightly lower than what we would have got one or two years ago.”
For Mark Rose, the reason behind the modest increase in supply is the change in legislation that ended rent controls earlier this year.
“The changes that came in last March allowed owners of properties where the tenant left voluntarily to reset their rent to full market value. That was definitely needed. It was a case of legislators finally accepting reality after nine years of rent controls. And that is now starting to have an effect… supply is what we needed, and I think that there’s a lifeline there now for that to happen.
“What used to happen before the rent controls were ended was that a tenant decided that they were moving out of their house – because they had bought a house or were moving somewhere else or something else. In the ‘before’ scenario, when they left and the rent was, say, €1,500/month, the property owner was capped on what he could charge the next tenant,” Mark Rose said.
“It would have to remain at that level or very slightly above it. Now when the tenant vacates voluntarily, the rent is going to €2,200/month or €2,500/month. That gives the property owner incentive to remain in the business of letting his property. Whereas during that rent-control period of nine years before last March, that incentive was much less… all things were pointing towards the owner just selling the property. That was good news for us because we’d normally get to sell the property for them but it was really bad for the rental market… Simply put, that legislation was the first nod to reality in the market and it’s already having an effect.”
“There’s also the new LDA (Land Development Agency) sites that are getting ready to be completed at Horgan’s Quay this year. They’ll be let on a cost-rental scheme so it will be interesting to see if they’ll have an impact on the overall prices in the rental market in Cork. I don’t there’s enough to have an impact on the market.”
“The main thing that has happened in the last year is the increase in administration,” says Pauline O’Sullivan of Prime Letting & Management Ltd. “There’s a big volume of it, it’s hard to get your head around and it’s hard to keep up with. I do think that has forced landlords to use agencies… I can see how being a small landlord operating on your own has become quite difficult.”
According to Sonya Irwin of Absolute Property Group, the supply of houses for rent in the private sector is still quite moribund but she expects and hopes that the increase in supply of houses through the public sector in the last year will have an impact on overall supply in the coming year. It is, however, a moving target in many ways.
“A couple of years ago, the Government were saying, ‘if only we got to 40,000 houses a year…’ Now commentators are saying, ‘if only we got to 60,000 houses a year’ and it’s currently looking more like 40,000 houses for 2026.”
“With all the new houses and new apartments that are being built, that is freeing up a certain amount of rental properties,” says Orla O’Donovan of Trading Places. “A lot of those buying the new homes are first-time buyers. A lot of them are currently renting, so they’re leaving the rental properties and that is creating a little bit of supply for sure.”
For Róisín Murray of Sherry Fitzgerald Lettings, the overall lack of supply is the overriding problem in the market, despite the evidence of some green shoots of fresh housing on the market: “The shortage of rental properties remains a significant challenge,” she says. “Without a meaningful increase in supply, there is little prospect of rental prices easing. Increasing supply means encouraging existing landlords to remain in the sector and making investment in rental housing more attractive. The recent legislative changes are a positive step, but further improvements are needed.”
