Proposals to introduce more rent controls and an eviction ban would “kill” the private rental sector, Irish Institutional Property chief executive Pat Farrell has said.
Mr Farrell, whose group represents institutionally financed investors with significant international backing in the Irish property market, was addressing the Irish Home Builders Association’s house-building summit in Croke Park on Tuesday.
He said funds were “already being built” that were ready to invest in the private rental sector, but that Ireland must tighten up its policy framework to attract them. “There is no certainty for institutional investors. Ireland is seen as an attractive market based on the fundamentals, but it is not seen as an attractive market based on the particular policy framework you have here, which has been categorised by chop and change over the past number of years.”
Mr Farrell was asked by moderator Ivan Yates what the impact would be of a Sinn Féin minister for housing in the morning. “It will kill that whole market,” he said. “They would shut out everybody who wants to rent in the market. The incentive to invest would be stopped.”
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Marian Finnegan, managing director of Sherry FitzGerald Residential and Advisory, said Sinn Féin policies would lead to an exodus of young people from the country. “We continue to see the exit of private landlords. We are going to have a huge, huge problem with our young people deciding they can’t stay home with their mum and dad any longer, and they are going to leave the country.
“We need a solution for the entire country, for all types of accommodation, and broaden our scope, to keep Ireland attractive for our young people.”
Ms Finnegan called for “an awareness campaign” of what the effects of more rent controls would have on the market.
“The politicians who are putting that forward are doing so to win the young vote. But in doing that we will actually see those people leaving the country, because if you bring in those measures you will absolutely cripple investment in the marketplace.
“We need an awareness campaign on the impact of what looks like a very populist decision would be so young people realise that these decisions will have a very negative impact on them – not a positive one. We need to remove rental caps. They don’t work. They’ve never worked in any other country. Why we thought they would work here is beyond me.”
Developer Michael O’Flynn said Taoiseach Simon Harris’s target of 50,000 homes per year should “probably” be closer to 60,000. He added that while there was capacity in the sector to deliver on the targets there would be ‘no hope’ of achieving this without addressing the funding gap.
“The Irish State has to get involved here. I don’t disagree they are maxed out. But it’s a different form of funding [that’s needed]. It’s working capital funding. Maybe in conjunction with the banks, an underwriting arrangement, given the risk involved here.”
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