Currently, Rent Pressure Zones (RPZs) limit annual rent increases to 2 percent, regardless of whether there are new residents in a property.

The OECD debated that strict rent controls may discourage institutional investors from funding new housing and could lead landlords to sell properties, reducing rental supply. However, it warns against policies that incentivise tenant evictions.

According to the report, Ireland should allow rents to be re-set between tenancies and adjusted for inflation during a residency, but care should be taken that it does not lead to unfair termination of contracts.

The study opposes reintroducing tax incentives for housing construction, cautioning the previous schemes led to a “miscalculation of housing” and substantial fiscal losses. It criticises Help to Buy and First Home, two government programmes supporting first-time home buyers, arguing they could drive higher house prices and rents over time.

Planning delays are another concern, with the report highlighting that frequent judicial reviews are the main obstacle to increasing housing supply, noting that construction costs in Dublin are 15 percent to 30 percent higher than in other European countries.

The OECD suggests increasing taxes on housing, including a higher local property tax on second homes and limiting the tax-free exemption on the sale of a primary residence, advocating for raising the 3 percent residential zoned land tax to encourage development.

Furthermore, the report emphasises the need for investment in Ireland’s electricity and water infrastructure to support new homes, questioning the lack of household water charges, and proposed review of funding models to meet high investment costs.

On the economy, the OECD forecasts 3 percent growth in 2025 but addressed that government spending breaches could harm credibility. It calls for higher carbon taxes and reductions in fossil fuel subsidies, particularly diesel, which it says undermines climate goals.

Paschal Donohoe, Minister for Finance, has said that the Government is “going to consider all views” in relation to Rent Pressure Zones and “the important role they play” in the delivery of homes.

“What we have said in recent days is the need here for balance”, he concluded, acknowledging the need for a balanced approach to rent controls and housing policy.