The Government’s latest housing plan could end up preventing new homes from being built, according to financial analyst Karl Deeter.
New measures to go before Cabinet this week will reserve up to half of all new housing estates for first-time buyers.
It means up to 80% of all new estates would be set aside for first-time buyers and social and affordable housing.
The plan also aims to tackle the actions of cuckoo funds by banning investors from bulk-buying estates that contain less than 50 houses per hectare.
The move is expected to prevent them from bulk-buying housing estates while leaving the way clear for them to bulk-buy apartment blacks.
On Newstalk Breakfast this morning, financial analyst Karl Deeter said the measures could have “unintended consequences” down the line.
“The issue is that this may actually prevent housing,” he said. “There are funds who are the ones supplying housing whether you like it or not.
“I know there are certain cases where they have jumped in last minute and bought a housing estate - I don’t agree with that - but this kind of rule may mean you prevent housing.”
He said there is a “whiff of a two-tier society” off the plan, noting that it could ultimately mean investment funds – which are generally involved in the rental market – are only permitted to buy apartments.
“There are large companies out there that are saying, ‘we need some houses, not just apartments but the way the rules are being made shows that they can fund now apartments but not houses, which is weird because if the idea is that funds build for renters then why are the renters being shuttled down an apartment-only future?” he asked.
“I mean renters are people too. Let’s not forget that all of the outrage that occurred so far was because more housing was being supplied to renters – typically families – who couldn’t afford or don’t want to buy a house.
“There is a whiff of a two-tier society off that. The Irish Government as well has scored a bit of an own-goal because they ultimately supported some of this through the strategic investment fund which has backed some of the funds in this activity.”
He said the constant changes to Government housing policy make it harder to get houses built.
“We have a property market where there is just constant intervention,” he said.
“It is so difficult for anyone to have any foresight because every time you turn a corner, the Government are there with a new set of policies.
“If you have a housing crisis and you are trying to say, ‘look, build as much housing as you can,’ then to start to do things that can prevent that housing from occurring, is kind of questionable.”
Asked what advice he would offer the minister on this latest policy, he said: “Don’t. Just don’t.”
“If you want to fix a situation that is already riddled with uncertainty, you have two choices,” he said.
“You either jump in as the Government and you build the houses – we have shown that we can’t, we won’t and we didn’t – or let the people that build houses, build houses and stop trying to make more ... additional complicated rules to make everything work out by.”
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