The purchase by institutional investors of completed housing estates is unacceptable and will be examined, Taoiseach Micheál Martin has insisted as the row intensified over the purchase by investment funds of the majority of homes in developments in north Dublin and Co Kildare.
“We do not want institutional investors competing with first-time buyers,” Mr Martin said. “Our priority is first-time buyers.”
He said that institutional investment was brought in “to add supply, not to displace supply, and that is the critical differential point”. They had to “distinguish between good capital and bad capital”.
Mr Martin also warned that local authorities should not be engaging in long-term leases with these investment funds.
He insisted in the Dáil that the Government will examine the purchases by an institutional investor. He said he had spoken to the Minsters for Finance Paschal Donohoe about the matter and Mr Donohoe “will meet colleagues this afternoon on this”.
“This issue will be examined, across the board in terms of ensuring that the objective of inward investment in the residential market is to add supply not displace supply, and not to compete [with] first-time buyers in this suburban market.”
Elsewhere at a press conference Tánaiste Leo Varadkar also said that investment funds buying up housing estates is "undesirable" and "the Government is going to have to act on this".
Mr Varadkar said that investment funds mostly invested in apartment buildings before or during construction but there’s been a change in recent months to whole housing estates or part of them.
He said: “It was never intended that they would enter into that part of the market and are taking away properties that could be bought by first-time buyers or upgraders... it’s working against the principle of home ownership.”
Mr Martin gave no indication of when the issue would be resolved following questions from Sinn Féin leader Mary Lou McDonald and Social Democrats TD Catherine Murphy about when the Government would act on the issue, which arose after Round Hill Capital bought 112 houses in Hollystown,west Dublin to rent them out and bought most of the houses in a Maynooth, Co Kildare development for rental.
‘Sweetheart deals’
Ms McDonald accused Fianna Fáil and Fine Gael of “rolling out the red carpet” for investment funds with “sweetheart deals” of no corporation tax or capital gains tax and only minimal stamp duty.
Claiming Government policy is depriving first-time buyers of the opportunity to own their own home, she said that “people scrimp and save to buy a home but investment funds swoop in to push that away from them”.
She said investment funds with a “war chest” of up to €1 billion can gazump any buyer “because Government allows them to”. And she claimed the Government is in “cloud cuckoo land” if it believed that €450,000 is an affordable price for a home in Dublin.
Ms Murphy said another estate had been purchased by the fund a number of months ago.
She told the Taoiseach “there’s a skewed ideology at play here and you must tell us when there’s going to be a change on this. It can’t be something that's pushed out to the budget.”
She said every TD would sit in the Dáil for a weekend if necessary to pass legislation overnight. “We have to pass legislation to stop this.”
Ms Murphy also said that on the other side, these investment funds were renting homes to local authorities on a long lease.
Mr Martin said “I want to be very clear about this that no county council should be on the other side of this engaging in long leases with these institutional investors.”
There was some merit in short-term limited leases “but leasing overall, long-term leasing doesn’t represent great value”.
