Business
Too early to say whether measures to lure property investors back are working
DCM Editorial Summary: This story has been independently rewritten and summarised for DCM readers to highlight key developments relevant to the region. Original reporting by Irish Times, click this post to read the original article.
It is too early to say whether Government attempts to lure investors back into the Irish property market are working, the head of Dublin estate agent Hooke and MacDonald has said.
Despite a pickup in new home completions, Ken MacDonald said the vast majority of the 12,047 apartments completed in 2025 were commenced in the 2022-2024 period.
This is because of the time it takes to build apartments compared with houses, “so these completions were not influenced by the rent regulations announced by the Government in 2025”, MacDonald said.
“Since the introduction of the rent caps in November 2021, new PRS [private rental sector] investment/forward sales has come to almost a standstill,” he said.
“As a result of this, the majority of apartment completions in 2025 and presently under way in 2026 are for the LDA [Land Development Agency], AHBs [approved housing bodies] and local authorities and not for the private rental market,” he said.
PRS investment here fell off a cliff in 2022 amid a hike in both borrowing and construction costs, leading to marked slowdown in new-home completions. The industry also cited tough rent regulations as a factor.
To entice investors back, the Government has loosened rent controls, changed apartment design standards and, in the recent budget, cut the VAT rate on new-build apartments.
“Following limited PRS transactions in 2023 and 2024, there was increased activity in 2025, amounting to €400 million,” MacDonald said.
“However, the majority of it was for stabilised stock [existing and tenanted stock], which of its nature does not increase rental supply,” he said.
MacDonald predicted there was likely to be about €350 million in PRS transactions in the first quarter of 2026 “but again it will comprise mainly of stabilised stock”.
“New forward sales of apartments are still curtailed by viability issues, thus restricting new rental supply and investment opportunities,” he said.
“It appears at this stage that the new Government regulations will improve sentiment but will not be sufficient to re-energise this vital sector,” he said.
The Government’s revamped housing plan promises that a minimum of 300,000 new homes will be built by 2030 but a sharp slowdown in commencements has placed a question mark over that target.
While new home completions rose by 20 per cent to 36,000 last year, the Central Bank forecasts that figure will rise to 37,000, 40,500 and 44,500 in 2026, 2027 and 2028 respectively, well below the Government’s target level.
The Government’s plan depends heavily on the revised National Development Plan and the recently established accelerating infrastructure taskforce delivering new infrastructure that relieves current constraints in energy, water and wastewater.
The Government this week appointed senior civil servant Garret Doocey as its new “housing tsar”.
His official title will be head of the Housing Activation Office and deputy secretary general of the Department of Housing.
His appointment comes 10 months after Minister for Housing James Browne attempted to appoint former Nama chief executive Brendan McDonagh to the role.
That appointment came unstuck when it emerged McDonagh would retain his Nama salary of some €430,000.
