More than 43,000 properties have exited the private rental sector over the past five years, according to estate agent Sherry FitzGerald, which said Ireland’s “stringent rent controls” are leading investors to seek more favourable markets.
Sherry FitzGerald’s quarterly residential analysis reports a net loss of some 42,300 rental properties owned by private investors from January 2020 to the end of last March.
“This ongoing trend of landlords exiting the sector, which has been evident over the past decade, has become particularly pronounced in recent years, underscoring the mounting challenges faced by the rental market,” it said.
This trend continued throughout the first half of this year, with only 9 per cent of second-hand homes purchased through Sherry FitzGerald bought by investors, while 31 per cent of properties sold were from investor vendors.
“The depletion of small, private landlords from the rental market highlights the urgent need for increased investment in the private rented sector,” the group said.
“Recent legislative changes, such as the expansion of rental pressure zones nationwide and upcoming adjustments to the rent system in March 2026 – including allowing landlords to reset rents to market rates between tenancies – represent important steps forward.”
However, it added that “more comprehensive action is required” to make apartment construction more viable, especially to enhance supply within the rental sector.
Sherry FitzGerald managing director Marian Finnegan said: “Ireland’s relatively stringent rent controls have led investors to seek more favourable markets in recent years.
“While the upcoming changes to rent caps for new-build apartments in March 2026 are a positive development, attracting the level of private capital necessary to meet the demand for 56,000 new units annually will require far more robust incentives.”
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Supply constraints in the rental market are “mirrored in the broader residential sector”, the group said, where a limited availability of second-hand properties continues to place upward pressure on prices.
The estate agent’s latest analysis of price trends confirms sustained growth in residential property values, primarily driven by the ongoing shortage of second-hand stock.
Its analysis shows the average value of second-hand homes in Ireland increased by 1.6 per cent in the second quarter, bringing the total rise for the first half of the year to 3.9 per cent.
Over the past 12 months, property values have risen by 7.4 per cent, further highlighting the ongoing challenges in the housing market.
“The persistence of price growth into the first half of 2025, despite global uncertainties, reflects the continued shortage of second-hand supply, which remains a key factor driving price increases in the residential market,” said Ms Finnegan.
In Dublin, the average value of second-hand homes increased by 1.5 per cent in the three months to the end of June, with prices rising by 4.2 per cent in the first half of the year. On an annual basis, price growth in the capital reached 7.4 per cent.
Outside Dublin, price growth was more pronounced in the quarter, at 1.8 per cent, resulting in an annual increase of 7.2 per cent. Cumulative price growth for the first six months of the year outside the capital stood at 3.5 per cent.
A review of transaction activity for the first quarter showed 9,743 housing transactions by household buyers, a 1.4 per cent increase compared with the same period in 2024.
However, activity in the second-hand market declined by 2.1 per cent, with about 7,833 second-hand units sold in the first quarter, reflecting the severe supply shortage in this segment.
In contrast, the new homes market demonstrated strong growth, with a 19.3 per cent increase in transactions compared with the previous year. However, this amounted to just 309 additional units sold, bringing the total to 1,910 transactions.
The Greater Dublin Area (Dublin, Kildare, Meath and Wicklow) remained the focal point for new housing activity, accounting for about 50 per cent of all new home transactions to the end of March.
