While Irish government’s proposals to reform rental caps and fast-track planning have been broadly welcomed by the market, flip-flopping policies and regulation changes are turning off the tap of international residential investment.
A seemingly endless cycle of populist approaches to housing reform, largely focused on placating renters faced with crippling housing costs, has failed to address the fundamental issue behind them — lack of supply.
Bisnow/Joana Frade
Hines’ Brian Moran, Union Investment’s Friedrich Warmbold, Winterbrook Property’s Kate Rhatigan, JLL’s Niall Gunne and moderator McCann Fitzgerald’s Barrett Chapman.
“There is a serious viability issue because of all the tinkering with the investment market, which, unless addressed, won’t be sorted out,” Hines Senior Managing Director Brian Moran told delegates at Bisnow’s Ireland Residential Investment And Development Conference 2025, held at the Aviva Stadium.
The government has set a five-year target of 300,000 housing unit completions, abandoning annual targets, but less than 25,000 new homes were built in the first three quarters of this year, according to the Central Statistics Office.
“I was hoping that the latest policy proposals would have more meat on the bone,” Moran said. “There is a lot happening with the Land Development Agency and the Affordable Housing Councils, but we’re way off. The shocking reality is that we’re building a third of what we need. There is no shortage of capital, Dublin is seen as an amazing place, but we keep shooting ourself in the foot.”
He said he is concerned that the narrative continues to be driven by a populist message about keeping rents capped, but, instead, the crisis needs a “realistic conversation” to find a resolution.
Rents should track wages, with no caps or collars, to restore confidence, he proposed.
“We need policy stability because the private sector is based on the medium to long term, and I don’t think the government understands how it works. They need to choose a system that works from the current hotchpotch,” Trinity College Dublin and Daft.ie report author Ronan Lyons warned.
While he described the proposed reforms to rental controls change as “two steps forward,” he also warned that there was still too much focus on national competition among counties for new homes funding, rather than a realisation that international investment was comparing Ireland with other countries.
“We need to look at project-specific tax breaks, giving construction cost write-offs to make development viable; instead, we’re in a holding pattern between now and March [when new regulations are scheduled to come into force] for activations and starts. Will there be an uptick?” he questioned.
Despite the negative impact of political stasis, JLL Capital Markets and Irish Living Lead Senior Director Niall Gunne said the demand and economic drivers meant that Dublin had remained on the investment radar.
Gunne said he is seeing capital from Australia, Canada and Europe looking for opportunities in Ireland, especially as build costs are stabilising, there is more clarity around regulation, and interest rates are coming down.
“We have the highest private rental sector yields in Europe, with the widest spread between prime yields and Irish government sovereign bonds, so investors can see value for money,” he said, though he warned this also reflected systemic issues.
Yields are so high because rental protection zones have seen 11 legislative changes over recent years. That means international institutions are interested, but these shifting sands have given them pause for caution, he said.
Gunne described the current situation as a balancing act between tenant affordability and the need to attract capital and warned that, currently, successive governments had been too reactive in their policy approach.
“The knock-on effect of all the tinkering will take a long time to recover from. The only way to address this is to build,” he said.
Despite the concerns, Union Investment Real Estate Head of Investment Management Residential Friedrich Warmbold said Dublin still compared quite attractively with other markets, where yield compression has already taken place, supported by Ireland’s strong demographics.
“The issue is whether there is enough product available and whether there is development product,” he said. “But the 2% rental cap was certainly not positive and would not have encouraged us to invest any more.
“As a long-term investor, we actually like regulation as we can underwrite and model against it. The issue is when it’s changing. Most activity will be on standing stock, so let’s see what happens. But in my view, the main issue is the lack of supply.”
Winterbrook Property Developers Director Kate Rhatigan also stressed the importance of utilities being in place for development, pointing out that much of the land designated for residential is, in reality, being severely delayed by a lack of power and water.
“Viability comes down to land and infrastructure, especially utilities,” she said. “If we are going to be future-focused, then we need to future-proof the infrastructure and utilities need to be put in in advance. If not, that infrastructure is two or three years behind the development.”