Following centuries of turbulent Landlord and tenant relations in Ireland it is not surprising that property ownership and tenancy issues still dominate our lives. But we have come a long way, particularly in the last two decades. I remember in the 1960s and 1970s thee was no organised private rental market. Tenants have no options but to endure firetrap accommodation, mainly in converted pre-war houses in the likes of Rathmines, Ranelagh and the north and south circular road

In 1981 the government introduced the Section 23 tax incentives for investors and this bold move heralded the start of the modernisation of our rental stock. This gained pace during 1990s and the axis of the rental sector switched from the inner suburbs to the city centre. People wanted to reside in a living city – the heart of Dublin was being revitalised and owner-occupiers and tenants were flocking to be part of it.

The recent temporary slowdown in the economy and the troubles encountered in the IT sector were bound to affect, to some extent, the letting market, particularly the corporate sector. This may be the case, but not to the extent that some people have suggested and lately there are signs that a number of companies are again recruiting. For instance, one company is relocating 300 employees to Dublin this year. There are 1,000 more jobs being created in the IFSC this year, bringing total numbers to 12,300.

The ending of the anti-investor measures and the restoration of mortgage interest relief in 2001 were intended to have the effect of slowing down rental inflation from the unacceptable levels it had reached, so its puzzles me why some commentators express surprise and issue warnings over this.

Rental stability is in everyone's interest. It is good for the economy, inflation, inward investment, job creation and tenants. It is pointless to use it as a reason investors should be wary. Very often, of course, there are other agendas to play, some of them generated by parties with a vested interest in convincing people to invest in non-property products, which traditionally are much more volatile than property.

Many myths are expounded about the property market, some of them put out to gain publicity. The fact is that the more outrageous the claims, such as by claims, such as by economists and magazines recently, the more publicity they receive. Scaremongering makes good copy. Don't let the facts or the poor forecasting track records of the contributor get in the way of a good story. Balance is often missing as we witnessed with the lead story on national TV news recently or on the night of September 11 th , 2001, when an economist advised people to avoid buying houses for at least a year – only for those people who took the advice to have to pay 15 per cent more a year later. Nobody ever asks these people how they got it so wrong.

Residential property investors are not vulnerable people having their last throw of the dice. Most have seen and enjoyed the capital gains made in property over the decades. If they are new to the market I find they generally go for good letting areas and make conservative assumptions. They are not banking on this changing – nor do they need it to do so for their investment. They are buying because they buying because they believe that residential property is a safe, secure investment with reasonable growth prospects and a proven track record.

The dramatic interest rate reductions of recent years have been a good help to investors and indeed to all property owners. In many cases, repayments on borrowings have halved. When people talk of “ softening” or static rents they fail to mention falling interest rates and take no account of the fact that residential rents in key letting areas have risen by over 60 per cent in the last five years.

The rental market is in a healthy state in prime letting locations- the city centre and other urban centres- and there will be a supply deficit in these areas for many years to come. It is not so active in many suburban areas but this is hardly surprising. However, lettings can be achieved in most areas if the rents are realistic and the property is well presented and maintained.

The rental market has become more complex. It is essentially now a three-tier market: firstly, high-specification city apartments: secondly, standard good quality modern apartments and finally substandard poorly maintained properties. The latter are not attracting tenants, nor should owners of such properties be surprised. Unless they look after them and upgrade them every five or six years they will suffer the consequences.

The high-specification apartments in the city centre are attracting tenants, with rents of €1,500 to €2,000 per month being paid for two- bedroom apartments, depending on size, design and facilities. Good quality new or modern two- bedroom city apartments are realising €1,100 to€1,500 per month. Rents are likely to rise in the city centre for such units by 3 to 5 per cent per annum over the next five years.

The recently announced legislation relating to the rental market is to be welcomed as it brings fairness, discipline and certainty to this sector. It represents the fruits of two years of good work by the Government-appointed Commission into the Private Rented Sector. Parties representing different interest groups have called for changes to it but I believe the Government should resist changes and bring it into law. It will benefit tenants considerably and is not a threat to property owners. Owners of modern, well-maintained property have nothing to fear from it. The older-style investors of converted property are predictably vocal in their dislike for change and consequently they are inclined to talk the market down.

Ken MacDonald is Managing Director of Hooke & MacDonald, specialists in the new homes market.