The Perfect Storm: Why a Cohort of Landlords Are Exiting Ireland’s Residential Market
In recent years, a growing number of landlords—particularly small to mid-sized investors—have been steadily exiting the Irish residential rental market. While this trend has sparked concern about dwindling rental supply and rising rents, the motivations behind these exits are often misunderstood or oversimplified.
The reality is more complex: a “perfect storm” of financial, regulatory, and structural pressures is pushing certain landlords to sell. Here are the core drivers behind this shift:
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1. Strong Capital Values Create an Exit Opportunity
Property prices have appreciated significantly over the past decade, especially in urban centres. For landlords who bought in the post-2008 period, the potential to realise capital gains is now highly attractive.
In many cases, the prospect of a lump-sum return outweighs the shrinking margins and rising risks of holding and renting residential property. In effect, strong asset values have made the “sell” button look very appealing.
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2. Over-Taxation and Marginal Returns
Landlords in Ireland often operate in a highly unfavourable tax environment, especially compared to other forms of investment.
Rental income is taxed at marginal rates, sometimes as high as 52%.
Deductions are limited.
PRSI and USC add further strain.
When combined with rising costs (e.g., insurance, maintenance, interest rates), many landlords find their net yields falling below acceptable levels, prompting them to exit while property values remain high.
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3. Rent Pressure Zone (RPZ) Regulations
RPZ rules—designed to protect tenants from steep rent hikes—have had unintended consequences.
For long-term landlords, rent caps often mean they’re locked into below-market rents, while their costs continue to rise. Meanwhile, newer landlords who bought at higher valuations can set rents closer to market rate, creating an uneven playing field.
The result? Legacy landlords often feel financially penalised for tenant stability.
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4. A Perception of Regulatory Bias
There’s a growing sentiment among some landlords that the Residential Tenancies Board (RTB) is biased or overly protective of tenants.
While the RTB serves a critical role in maintaining fairness in the rental sector, certain landlords view the dispute resolution process as time-consuming and costly, with limited recourse for property owners in cases of arrears, damage, or anti-social behaviour.
This perception—fair or not—has created a sense of disempowerment and risk, further tipping the balance toward exit.
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A Quiet, Accelerating Exodus
It’s important to emphasise that this isn’t a blanket trend across the sector. Many landlords remain committed, particularly institutional investors or those with professional scale. However, for “accidental” landlords or smaller investors, the equation has changed.
With returns compressed, risks heightened, and regulation increasingly complex, the incentive to stay in the market has eroded—especially when capital appreciation offers a cleaner, simpler path to exit.
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Final Thought
Policymakers and stakeholders must grapple with the long-term implications of these exits. The private rental sector still houses a large share of the population, and supply constraints will only worsen if experienced landlords continue to leave.
Recognising this “perfect storm” isn’t about picking sides—it’s about understanding the full landscape so that solutions can be both tenant-protective and investment-sustaining.