The Institute of Professional Auctioneers & Valuers says the Government must heed warnings from the European Commission that rent controls are having unintended consequences on the property market.
Pat Davitt, IPAV chief executive, says rent controls failed to take into account the fact that many landlords who were happy with their tenancies did not raise rents to market levels.
Mr Davitt said on the basis of market intelligence from IPAV members he expects the Residential Tenancies Board (RTB ) must be seeing a very large uplift in the numbers of rent increase notices lodged with it since the Rent Pressure Zones were introduced.
“These would involve substantial increases in rents in many instances,” he said. “The blanket introduction of such rent controls was a mistake. They appear to have been based on new tenancies only, without regard to examining what proportion of landlords were charging headline rents and what proportion were charging lower rents.”
Mr Davitt called on the Government to heed the European Commission, which has warned that rent controls have had a destabilising impact on housing markets in other EU countries.
He pointed to a comprehensive study by DKM Economic Consultants for the RTB in September 2014, which concluded that rent regulations would see the impact falling disproportionately hard on the very people they are intended to assist.
“That study predicted that rent controls would see more private landlords leave the market and, sadly, that is what is happening,” he commented.
However, Mr Davitt said Minister Coveney’s initiative last week to release 2,000 hectares of land controlled by city and county councils and other public bodies and make it available to private developers and housing associations to provide at least 50,000 new homes is a very positive intervention.
“The supply deficit is so critical that it has to be prioritised above everything else in housing policy,” he said. “IPAV has on many occasions called on Minister Coveney and the Government to fastrack the promised detailed analysis of building input costs, given the centrality of the issue to housing supply.”