Officials have found investment funds are not breaking competition rules by leaving Dublin luxury apartments vacant.
It’s estimated that hundreds of high-priced flats around the capital are empty. Rents for many of these properties are over €2,000 per month or higher. They are typically owned by large investment funds.
It has been reported that owners are afraid to drop prices and get stuck with lower rents. As all of Dublin is designated as a rent pressure zone, landlords cannot increase rent prices by more than 4% per year.
A member of the public complained about this to the Competition and Consumer Protection Commission (CCPC). He said by keeping the properties empty instead of dropping rents, investment funds are keeping prices higher than they otherwise would be.
The CCPC found that there are many vacant high-end properties around Dublin. It referenced a report from Goodbody stockbrokers, which estimated that vacancy rates in some new luxury developments are at “about 30%”.
However, it said this is likely due to the Dublin rental market going through a “period of uncertainty” due to the impact of COVID-19, which has caused more vacancies across the city.
It also said investment funds do not own enough properties to significantly affect the market by themselves.
The CCPC referenced Ires Reit, Ireland’s biggest private landlord, which owns over 3,700 homes.
It said: “Despite the size of Ires Reit's portfolio, its market share in the greater Dublin area accounted for less than 5% of the total available (rental) properties.
“In addition, the CCPC's determination identified a number of other large scale suppliers of rentable residential property in the greater Dublin area and in the state.
“(They) compete with one another, and none of these entities have the requisite market power to manipulate prices.
“The CCPC does not at this time have evidence of a breach of competition law to warrant taking any further action in relation to residential property investors. In light of the above the CCPC will not consider this complaint further.”
"Significant impact on local rents"
Lorcan Sirr, a housing lecturer at Technological University Dublin, said the CCPC was correct that investment funds don’t own enough apartments to move prices nationally.
However, he said they can affect rents in smaller areas.
He said: “The problem is often they (the luxury flats) are concentrated, there’s a lot of them in the same area. If you take it at an average, they constitute a small number of the overall tenancies in the country.
“But because they are concentrated together in specific locations, they have a significant impact on local rents.”
Mr Sirr said properties should not be left deliberately vacant when there is a severe shortage of housing.
“In places like Paris and Copenhagen if you leave a property empty, you will pay significant additional tax for leaving it vacant. In Ireland, we’ve been very reluctant to tax empty properties, (although) there’s a good case to say we should be doing it.”
The CCPC declined to comment further when contacted by Newstalk.