New rental properties or new tenancies exempt from Government rent pressure zone legislation may be the reason why rent controls have failed curb rent inflation.
Rents rose at an average rate of 7 per cent in the second quarter of 2021 to stand at €1,323 per month nationally and €1,848 per month in Dublin.
Data also indicated that there were 14,140 new tenancies registered during the three-month period. However the figures do not differentiate between new and existing rental stock, or between properties that are inside or outside the rent pressure zones.
This shows the government cannot effectively determine which category of tenancy is driving inflation.
Ipav’s chief executive, Pat Davitt, has written to the RTB seeking a more detailed breakdown of the figures.
He states “Of the 14,140 new rentals in the system in the second quarter, I want to know how many are new rentals and how many are in the rent pressure zones and by how much each of those categories have gone up,” he said.
“That’s what the minister [of housing] should want to know,” he said.
The original rent increases at 4 per cent in designated locations has been to cap rent increases in line with inflation. Landlords bringing new rental properties to the market or signing new tenancy agreements related to properties that have been out of the market for at least two years are, however, exempt from the rules and free to charge what they like.
The suspicion is that it is these categories of properties that are driving rent inflation.