Dublin Living Market Report – H1 2025

Ireland's living sector experienced a significant slowdown following the interest rate hikes that began in 2022, a situation compounded by existing rent pressure zones (RPZs). The impact of these rate hikes became apparent in 2023, leading to a period of relative inactivity compared to long-term trends. This slowdown continued into 2024, with total investment reaching €481 million. While this represents a 10.8% increase from the previous year, it remains 56% below the ten-year annual average, signaling a significant market deceleration as investors paused larger deals in response to rising interest rates and uncertainty around rental regulations. Ireland's residential investment market experienced a sluggish start to 2025, with just €10 million deployed across two transactions in Q1.

Despite the subdued investment volumes, the outlook for living investment in Ireland is cautiously optimistic, underpinned by strong economic fundamentals and demographics. The country and the Eurozone have successfully navigated the inflationary period that began in 2022, prompting the European Central Bank to implement eight interest rate reductions between June 2024 and June 2025. Ireland boasts historic low levels of unemployment at 4%, a record-high number in the workforce, and elevated consumer spending, with household expenditure up 6.1% in January. Furthermore, Ireland's young population, with 27% under the age of 20 (the highest in Europe), suggests sustained demand for rental properties over the next decade

In June 2025, the government announced reforms to the rental sector, with the aim of boosting inward investment, increasing housing supply, and enhancing tenant protections. This announcement, made by the Department of Housing, seeks "to bring clarity and to bring certainty" to the market after a prolonged period of regulatory uncertainty. While the government anticipates these changes will make the Irish market more attractive to international investors, analysts believe that more comprehensive measures are needed to significantly boost inward investment and increase the viability of apartment delivery.

Beyond rental sector reforms, other significant factors impacting apartment completions include the planning system, targeted tax breaks, particularly on VAT, and development levy waivers. The uncertainty surrounding rent regulations has been one piece of a puzzle that has created a slowdown in apartment completions in Dublin.

JLL's latest forecasts indicate a second consecutive year of declining apartment completions, following a peak two years ago. 2025 apartment completions in the capital are projected to fall by 40% from 2023 levels and by 17.8% from 2024 levels. While apartment deliveries are projected to increase in 2026 and 2027, the 2024 Report of the Housing Commission indicates that these higher completion rates will still fall short of meeting demand. It estimates that between 19,600 and 36,400 apartments are needed annually to satisfy housing needs. Apartment completions will fall below this annual requirement, on average, by 49% in 2026 and 2027, therefore not meeting the lower end of the output requirements.

It is essential that, over the coming months, rent policies are altered in order to be conducive to the creation of new apartments.