Irish property prices have smashed through their Celtic Tiger peak. As of mid-2025, the median home costs over €370,000 — around 30% higher than pre-Covid levels.
But this isn’t 2007. Mortgage rates have climbed sharply. And from 2026, a wave of new legislation will cap rent increases and effectively ban no-fault evictions.
So the real question isn’t simply whether prices are high. It’s whether those prices are justified by the returns landlords can still earn. Has the traditional landlord model broken?
As a financial planner, I analyse both new property investments and existing portfolios for clients across Ireland — to see whether they’re truly pulling their weight, or if that capital could be working harder elsewhere.
In this article, I’ll cover:
The forces still driving property returns in 2025
Why positive cashflow doesn’t always equal profit
The impact of new rent caps and eviction rules
And how to calculate the real return on your capital — not just the headline yield
Why Property Still Attracts Investors
Despite higher rates and tighter rules, Irish property continues to attract investors. Here’s why.
1. Rental demand is strong.
Ireland’s population has reached 5.3 million and is still growing. Net migration added over 80,000 people last year, most of whom rent first. Smaller household sizes and urbanisation add even more pressure. According to Daft’s 2025 Residential Market Report, there are only about 1,800 rental listings nationwide at any given time. For landlords with well-located properties, tenant demand is almost guaranteed.
2. Long-term growth potential remains.
Ireland needs at least 50,000 new homes a year. In 2024, only about 30,000 were delivered. That shortfall — now estimated at 250,000 units — isn’t closing soon. Over a 10–20 year horizon, this imbalance still supports gradual price appreciation.
3. Property is an inflation hedge.
As wages and costs rise, rents and property values tend to follow. Even in Rent Pressure Zones, landlords can still increase rents by up to 2% a year. That’s not perfect — but over time, it helps protect purchasing power.
4. Leverage multiplies returns.
€100,000 invested in shares buys €100,000 worth of stock. €100,000 in property could secure a €300,000 investment, with a mortgage covering the rest. A 10% rise in property values then delivers a 30% return on equity. Of course, leverage works both ways — rising costs or falling values cut directly into your capital.
5. Property markets are inefficient.
Unlike financial markets, property isn’t priced to perfection. Deals are messy, negotiated, and often mispriced. Skilled investors can still find value through refurbishment, better management, or spotting opportunities others miss.
6. Tangibility and control.
For many investors, property feels more “real” than ETFs or pensions. You can see it, choose the tenants, and decide when to sell. That control can feel safer, especially in volatile markets.
Why Property Has Become a Tougher Game
On the surface, Irish property looks attractive. But the numbers tell a different story.
1. Higher interest rates erode returns.
In 2020, buy-to-let mortgage rates were around 4.65%. Today, the same loan costs 5.55%. On a €300,000 mortgage, that’s over €2,000 extra per year in interest — eating directly into cashflow.
2. Net yields are often misleading.
On paper, a property might show a 7% gross yield. But once you factor in tax, insurance, repairs, and management fees, that often shrinks to 2–3% net. Compare that to a global ETF delivering 5–6% after tax, with no tenants or boilers to manage, and the opportunity cost becomes clear.
3. Rent caps limit upside.
From 2026, rent increases will be capped at 2% per year — even if inflation runs at 5 or 6%. Meanwhile, costs like insurance, property tax, and maintenance face no caps. Over time, real income falls.
4. Eviction rules restrict flexibility.
From 2026, no-fault evictions will be banned for larger landlords. Smaller landlords will be limited to specific grounds like sale, renovation, or family use. If a tenant stops paying rent, you may be stuck — with RTB disputes already dragging on for months.
5. Outsourcing can wipe out profits.
For those who rely on letting agents and contractors for everything, fees can eat 20–30% of rental income before tax. In many cases, landlords outsourcing entirely will be lucky to break even.
6. Positive cashflow isn’t enough.
Earning €2,000 a year on a €100,000 investment is a 2% return. After tax, it’s even lower. Meanwhile, a pension or ETF portfolio could deliver 5–7% net with far less hassle. The question isn’t whether the property makes money — it’s whether it makes enough.
The Critical Metric: Return on Equity
Too many landlords stop at one question: “Is my property cashflow positive?”
The better question is: “What am I actually earning on the capital I’ve tied up?”
Return on equity measures how efficiently your money is working after costs, taxes, and hassle. If your property delivers 2–3% while your pension or portfolio could return 6–7%, your capital is being misallocated. Wealth isn’t built just by owning assets — it’s built by owning the right assets.
The 2026 Rules: Why They Matter
From March 2026, the landscape shifts again. Key changes include:
Rent increases capped at 2% per year, regardless of inflation.
No-fault evictions banned for larger landlords, with smaller landlords limited to narrow grounds.
Stronger RTB oversight, with slow and often costly compliance processes.
The direction is clear: more protections for tenants, less flexibility for landlords, and a higher compliance burden. The old model of “buy, rent, and wait for capital growth” is breaking down.
Analysing a Deal in 2025
Take a one-bed apartment in Dublin’s Charlotte Quay listed at €275,000. Assume €1,900 monthly rent, €3,000 annual expenses, and €8,000 for upgrades. With a 30% deposit and mortgage at 5.5%, the gross yield looks healthy at 8.3%, net yield at 7.2%.
But once you calculate cash-on-cash return — €5,615 net income on €96,500 invested — it falls to 5.8% pre-tax. For a higher-rate taxpayer, that’s just 2.8% after tax. Compare that with a pension or ETF at 5–7%, and the numbers don’t stack up.
This analysis applies not just to new deals, but to existing ones. I often find properties in client portfolios that look fine on paper but are dragging down overall wealth because they deliver 2–3% net when other assets could do much better.
Who Property Still Makes Sense For
In 2025, property isn’t for everyone. It mainly suits two types of investor:
The Passive Capital Defender: Cash buyers or those with small mortgages, seeking a modest, inflation-protected yield as a long-term store of value.
The Active Business Operator: Landlords who treat property as a business, using systems, scaling efficiently, and adding value through refurbishment or smart management.
For others, especially those seeking passive income, Irish property is no longer the easy win it once was.
Conclusion: The Verdict
So, is Irish property still a good investment in 2025?
Yes — but only for the right investor, with the right strategy.
Demand is strong, supply is weak, and long-term fundamentals remain in place. But higher rates, stricter rules, and tighter margins mean the game has changed. The margin for error is smaller than ever.
Growing wealth isn’t about owning assets for the sake of it. It’s about making sure your capital is working as hard as you are. That means regularly testing your property portfolio against other opportunities like pensions, ETFs, or even your own business.
I empower people to take full control of their finances, guiding them step by step towards building, growing, and preserving true wealth.
About the Author
Kevin Elliott is a Financial Planner and quantitative finance expert with over 18 years of experience in global financial markets. He has worked with top-tier institutions such as Bank of New York, Bridgewater Associates, RBS, CIBC, UniCredit, and Bank of America, where he served as Director in New York.
Holding a BSc in Economics and Finance and a Graduate Diploma in Financial Planning from University College Dublin, along with an MBA from Imperial College London, Kevin combines deep technical expertise with a passion for personal finance and wealth building.
Kevin is committed to helping individuals take control of their finances, invest wisely, and build long-term wealth. With a knack for simplifying complex financial concepts, he provides actionable insights on investing, retirement planning, and financial independence.
Whether you’re a beginner looking to start your wealth journey or a seasoned investor fine-tuning your strategy, Kevin offers practical guidance, expert analysis, and proven strategies to help you achieve financial freedom and security.
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