Commercial property often has really long leases, like 10-20 years. So one reason it may sit empty is that an investor thinks a slump will be short & doesn't want to be tied to a low-rent tenant. (Or doesn't want to break up a large space for small tenants, to wait for a large one... or because they are thinking of knocking it down & building housing, etc.)

I'm dubious that people in real-estate can't understand local prices, I mean within London there are vast differences by street-by-street. I'm also dubious that empty properties & claims about what they could rent for will fool many people.

This doesn't make sense to me. I don't think apartment complexes or individual landlords (who generally aren't super sophisticated) are thinking this way. Also, I just don't think this logic is sound. An individual landlord (or apartment) isn't going to affect the market as a whole.

Could they not increase the price in the following years if the market price goes up?

An apartment sitting idle should be a disaster - the higher rent obtained in the following years would need to be significantly higher just to break even in terms of yield.

I would've thought as full occupancy as possible at all times, i.e. renting out at market rates, would be the most profitable strategy.

Also happens a lot in Sydney, for the same reasons.

It kind of makes sense if the apartment is more valuable as new than as having been rented out before. But I do not think that is the case in Dublin.

Even if the apartment prices are rising rapidly and you plan to sell the apartment once the price goes up - why not also collect rental yield while you are waiting?

The owners are so huge they can't be bothered to care about hundred dollar bills lying on the sidewalk.

Seems like an exponential tax for domestic property not in use as domiciles could be a way out. Something tolerable the first year, but doubling every 6 months of vacancy without at least 6 months of occupation between.

There is no way a landlord in Dublin can get stuck with a tenant for 30 years. Rent increases are capped/set at 4% a year. The length of a lease is meant to be six years, but a landlord can terminate a tenancy at practically any time using a number of exemptions/loopholes in the law – to let a family member use the property, selling the property, refurbishing the property, etc. The rent increase limits should apply between tenancies too, as the landlord is legally required to tell new tenants the rent of the previous rent if they ask, but it is up to the prospective tenant to enforce this. At a time when demand for rental properties has never been higher, landlords can easily choose the tenants that don't ask these kinds of questions.

The root cause of high rents in Dublin is two-fold: competition for rental units is extremely high, which drives prices up; meanwhile rent is usually a function of the mortgage that exists on the property, which is determined by the price of the construction and/or the value of the land it's built on – and that's where you get massive amounts of speculation in Dublin. Land in Dublin is so expensive that it drives up the cost of everything else along the chain.

Most of the vacant units in Dublin are old, and in terrible shape. They're largely owned by people who either don't have the resources (money/energy/time) to improve them so they meet minimum standards, or they're owned by people who know they can let them sit for five or ten or twenty years and sell them for a profit then. The site they're on is nearly always going to increase in value, regardless of the state of the property.