New data from estate agent Sherry FitzGerald estimates that some 6,000 tenancies were lost in the rental market in the first six months of 2023.
The State’s largest real estate agent, in its latest quarterly report on the Irish property market, said that from January to June, 12% of buyers of second-hand homes through the estate agent were investors. 35% of vendors, meanwhile, were investors selling their properties.
An increase in house prices continues to slow as those looking to purchase a home grapple with higher borrowing costs.
The estate agent, based in Monaghan, said that the data highlights the “urgent need” for government measures to address “the ongoing emergency in the rental market”. It estimated that the price of a second-hand home in the Republic of Ireland increased by 3.4 per cent in the 12 months to June 2023, a decrease on a rate of almost 10 per cent, seen this time last year.
Managing Director Marian Finnegan commented: “The analysis of the first six months reveals a return to a more normal level of price inflation in the residential market. This comes after two years of heightened inflation in the post-Covid period.
“However, the underlying challenges in the residential market remain, including the risk surrounding output in the new homes sector and a further net loss of 15,000 units from the private rental market. Urgent policy changes are needed to address both the immediate and long-term challenges in the lettings market in order to stabilise the emergency in the rental sector,” she added.
The Property Price Register recorded 12,500 housing transactions in the first quarter of this year, excluding block sales and new homes acquired for social housing. This represents a 2% increase in comparison to the same quarter last year, and an 11.3% increase on the opening quarter of 2020, pre-Covid.
The estate agents said that activity in Ireland’s second-hand market “remained steady” with around 11,600 units sold, which was in line with 2022 figures.
In November last year, a report from the Residential Tenancies Board (RTB) said that up to a quarter of small landlords said they were likely to sell their properties and exit the market within the next five years.
Meanwhile, 15% said that they were likely to leave the rental market in the next 12 months. Just over half of small landlords said that they would be “unlikely” to sell in the same time frame.
Of landlords who had already sold their properties, more than a third said that it was because of the “regulatory” situation for the industry which made them not want to be a landlord anymore.
In March, experts warned tha Ireland’s crackdown on buy-to-let could spark an exodus of landlords from the market, presenting a significant barrier to economic growth.
As detailed in a report by The Telegraph, two fifths of all homes listed for sale in the Republic in the last three months of 2022 were buy-to-lets, according to professional body, the Society of Chartered Surveyors Ireland.
The number of rental properties listed on Daft.ie has fallen by 95 per cent since its peak 15 years ago, while a supply crunch continues to contribute to surging rents. Daft.ie said that average market rents increased by 13.7 per cent year-on-year in 2022.
The RTB survey also found that rent controls and other related policies were difficult to understand, in the experiences of both landlords and tenants.
“These surveys also showed that property owners, tenants, and agents found the regulatory framework and changing legislation difficult to navigate and understand,” said Tom Dunne, chairperson of the RTB.
The same survey revealed that the rental market has shrunk by as many as 43,000 properties in the last five years.