I’m not quite sure that is true. Eoin O Broin wasnt in full agreement in his interview yesterday about it anyway.
Desmond does make some good points and similar to what O Broin said, you need to cherry pick the good pieces and make them work.
He makes good points about the land hoarding and mortgage rates and rental market.
I’d disagree with his point on increasing taxed on the developers. As he points out, the developers built 95% of the stock put on the Irish market last year, whether for sale or not. Disincentive that on them, then why would they bother building? As much as people fear the dreaded developer, they are more than serving a purpose to the Irish market and the inflated prices of their sales are as much, if not more, the fault of the government and not them setting the prices.
A small note, but one that Desmond and O Broin also mentioned, is about co living. I’m not sure why people hate this and some want it banned. It serves a purpose. It absolutely wouldnt be for me, but it would suit some people. If the demand is there for it, then why not? If the demand is not there, then they wont do it. It’s not like Co living units are being brought in as some sort of widespread solution. Its another niche in the market that some people will suit.
I think you’ve missed the point on developers. This view has been the FG justification, “we need units by whatever means so we have to gift money to developers/landowners to provide them.” This policy is a proven failure.
I would disagree that there is a demand for coliving spaces. There is a shortage of units and so people are being forced into coliving spaces for lack of an alternative.
I never said that developers should be gifted land or money, I said the tax on their investment shouldnt be increased. It’s all well and good saying that developers are bad and hoarding units, but if you take them out of the market, the government, no matter who was there, would not be able to work by completely writing them off.
The biggest issue is there is no cohesion between each of the sectors in this country. You have the government in Dublin making their calls, but the activity mainly falls down to local councils to put these actions in place. You then have private ventures doing similar work that the government/LA’s intend to do, so just get lazy and let them off in the hope of either buying the units or getting the 5% as part of the Part V requirements. There is no central housing agency to tackle all the issues and bring all parties to the table to have one cohesive solution. Its a bit part solution that is trying to take all aspects and merge it into one haphazard solution.
I never said there was demand, I said if there was demand, it will be taken, if there is not, it wont be done. It will suit some people, it will not suit the majority. I genuinely do not see the issue with building these units. It works elsewhere, it provides an alternative solution to mainly single people who may be new to the city. Its not like Dublin is flooded with them. There are what, 3, maybe, of these in operation in Dublin now. What harm does it do to have these whereby others think they should be banned. If a developer or private entity puts these out and no one takes them up, then it is their loss to the venture.
They will be taken up, because people are forced to take them up due to current market conditions. That is not a good thing. This is an example of the thinking of oh the market will surely get it right. It’s bizarre to still follow that line of reasoning. The market has fucked everything up and made it worse. I don’t get how you don’t see that. In any event, not enough stuff is being built. If the state decides that apartments are needed more than coliving spaces then it should direct that that is where development initiative should go.
It comes the week after his wife challenged the fast track planning rules designed to get construction going quickly. “Fine Gael for de billionaires“ eh
Saying “throw money at it” is great but the houses still need to be built and given the rejection culture here, that is far more challenging than he suggests.
Desmond stole a couple of million from the Irish taxpayer by carrying out a con job resulting in him advising the State owned Telecom Eireann overpaying substantially for a piece of land in Ballsbridge which was owned by Desmond himself.
He then withdrew almost 1m quid in cash from AIB Grafton Street which was traced to McManus who had helped him in his swindle.
He then paid for the refurbishment of the yacht of one Charles J Haughey, which I am sure was completely legitimate
It’s rather galling to see this. I’m not blaming this Fine Gael government in particular, I’m blaming 40 years of chronic under investment and deliberate ghettoisation of social housing.
Housing policies ‘allow foreign investors to inflate market’
A recent study found that Dublin was the most expensive city in the eurozone for multinational companies to base employees in
JASON ALDEN/GETTY IMAGES
Paul O’Donoghue
Friday June 12 2020, 12.01am BST, The Times
The government’s housing policies support foreign investment funds that are intentionally driving up Irish rental prices, an advisory firm to wealthy investors has said.
Gillen Markets is a financial advisory firm based in Dublin. The company provides investment advice, and also has a money management service that primarily deals with clients with assets of more than €200,000.
In a note to potential investors, seen by The Times , the company said that the presence of foreign investors had driven Irish housing prices upwards.
Supporters of investment funds have argued the opposite - that foreign funds provide money that allows for apartments to get built, which increases housing supply and should help lower prices in the long run.
However, Gillen Markets said that developers building these apartments were focused on maximising rental income for buyers “rather than aiming to meet the needs of society”.
In its subscription newsletter offering investment advice, the company said that shares in Ires Reit, Ireland’s largest private landlord, looked to be “attractive” for potential investors.
Ires owns more than 3,500 apartments, almost all of which are located in Dublin and rented out. The average monthly charge across its apartments in 2019 was just under €1,600 last year.
Gillen Markets highlighted that Dublin rents have increased well above their pre-financial crisis peak of €1,325 a month in 2007, to approximately €1,620 at the end of 2019.
A study published earlier this week by Mercer, a US consulting firm, found that Dublin was the most expensive city in the eurozone for multinational companies to base employees in, primarily due to its high rent costs.
“The current high level of house prices and rents in Ireland’s residential property market have been driven in a significant way by the government’s housing policy with favourable policies attracting institutional investors, such as Ires Reit, into the market,” Gillen Markets said.
“In 2019 alone, 95 per cent of apartments built were acquired by institutions. Their gradual move into the market has contributed to higher housing prices and, thus, higher rents.”
Gillen Markets said that Ireland’s housing market has evolved to increasingly favour large, institutional investors over average buyers.
While a relatively recent feature of the market, there has been a surge in the number of “build-to-rent” developments. This is where a developer constructs a series of properties, usually blocks of flats, and sells them directly to a single investor, who then rents out the units.
In recent years, developers have used Strategic Housing Development (SDH) rules to apply for permission to build thousands of these units.
SDH rules allow housing developments of more than 100 to bypass local council planning. The government introduced this with the intent of incentivising developers to build more homes.
Permission has been granted for 16,000 homes since SDH rules were introduced in 2017. However, construction has yet to start on more than half of these properties. This has led to claims from several opposition politicians that developers have used SDH to get planning permission solely to increase the value of the land before selling it on.
“The introduction of the Strategic Housing Development legislation and the removal of the windfall tax in 2014 has benefited developers, and has led to increased land prices and therefore new build prices,” Gillen Markets said.
“The aim of institutions is to maximise its rental income, and developers are designing apartment blocks to maximise this income for the institutions, rather than aiming to meet the needs of society.
“With a shortage of housing in Ireland, and in Dublin in particular, institutions have been in a strong position to drive rents upwards.”
Gillen Markets said that this would benefit Ires Reit. However, it said a potential risk to the company would be if the government was to progress any large scale affordable housing programme.
“Overall, the current housing policy has benefited both institutions and developers at the expense of individual buyers. The potential risk for institutions such as Ires comes from a potential change in government policy,” it said.
“Local county councils across Ireland remain the largest landowners. A switch in policy, from maximising the revenue councils can obtain from developers for land, to providing that same land at more affordable prices, could both lower the cost of land purchased for housebuilding and increase the supply.”
It added: “A lower cost of building houses and apartments along with an increase in supply could, in turn, reduce house and apartment prices which, in turn, could flow through to a reduction in rents.”
Gillen Markets declined to comment when contacted by The Times .
A spokesman for the Department of Housing said: “In general, the key to resolving current issues in the housing market, including high rents, is increasing supply.
“That is why the government is committed to increasing the supply of all types of housing including social, affordable and private.
“Institutional investors represent one aspect of the housing market and have a role to play in increasing overall supply. Whilst the role of institutional investors has grown, it remains relatively minor in terms of the overall residential sector as a whole
Two pals of mine have handed back the keys to their rental accommodation in Dublin in the past few weeks and moved back to Cork on the back of ‘no back to the office til 2021’ announcements. View is they will never be back in the office on a sustained basis
Housing crisis in Dublin will be a thing of the past soon.
