Doubt at home and abroad has seen Irish property returns fall back into negative territory in the second quarter of this year. The decline of 3%, was the lowest rate since September 2009, according to the SCSI/IPD Ireland Quarterly Property Index.

'Fears of contagion from the continuing Euro-zone crisis have been allayed in the last few days, at least for the moment, but that was too late to influence property returns in Q2. And those concerns are arguably still of lesser importance than the imminent announcement from the Irish government regarding retrospective rent reviews,' said Malcolm Hunt, director of UK and Ireland Client Services at IPD.

IPD research has found that the retrospective abolition of upward only rent reviews could potentially wipe EUR 79 mln from income and lead to a fall in Irish commercial values of up to 20%.

'The uncertainty in the market is having a dire effect,’ Hunt said. ‘Speculation about the effects of such a policy, amid continuing chaos in the Eurozone, is clearly still impacting on commercial property performance. Values in Ireland are therefore suffering from declining occupier demand and extremely nervous investor sentiment. As a consequence, activity in terms of transactions has remained almost non-existent.'