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Rory Hearne: Stamp duty to stop investment funds 'has to be extended to apartments'

Government rules to dissuade institutional investors from buying up new homes have to be extended...
Jack Quann
Jack Quann

16.21 5 Oct 2021


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Rory Hearne: Stamp duty to sto...

Rory Hearne: Stamp duty to stop investment funds 'has to be extended to apartments'

Jack Quann
Jack Quann

16.21 5 Oct 2021


Share this article


Government rules to dissuade institutional investors from buying up new homes have to be extended to apartments.

That's according to Dr Rory Hearne, assistant professor in social policy at Maynooth University.

A petition is being presented by the housing expert to TDs in the Dáil, to stop global investment funds buying up entire estates and apartment blocks.

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He told Lunchtime Live the measures are not working.

"I've been highlighting this for a number of years that this was a problem - the way in which institutional funds were coming in here.

"The Government implemented a number of measures that they said would stop this, but it hasn't stopped it.

"They implemented a stamp duty, which was essentially an increased form of tax, on the purchase of houses.

"They didn't introduce the measure on apartments - and this is my key point, and the key point that is why the petition has still continued to grow, has been that apartments are excluded.

"And so we are seeing the continued bulk purchase by institutional investors, pension funds, global wealth funds of apartment blocks that are being built across the country.

"And also the development of these build to rent developments.

"One example in Marino on Griffith Avenue - it's called Griffith Wood - that a US investment fund has just bought up almost 400 apartments".

Dr Hearne says the Government is now relying on these funds for supply.

"The Government... they are still looking to these investment funds to provide this supply of apartments, and this is really problematic.

"The supply that they are building, these institutional investment funds, it's really expensive - it's unaffordable.

"It's pushing up the rents".

'This is not a good supply'

He says a one-bedroom apartment at the Griffith Wood development is being advertised for €1,900 per month.

"Because there's no cap on new rental units that are built, there's no end to the price that they will charge at.

"And these funds are in here to try maximise what they can get out of their property, they see it as an investment - it's not the provision of a home as we would understand it.

"So this supply, my argument is, is not a good supply.

"These institutional funds and investors - they want to create a class of people who rent permanently, they want generation rent."

'Dublin vs Dusseldorf'

But he says Ireland is not in the same position as other EU countries when it comes to long-term rentals.

"Renting your home should be as secure and affordable as owning your home, there should be no difference.

"The problem in Ireland is the tenant in Ireland is in a completely different situation then your friends in Dusseldorf.

"In Dusseldorf in Germany, they have lifetime security of tenure - once you're paying the rent and you're not causing damage.

"They also have affordable rents, we have neither here in our private rental market".

And Dr Hearne says it is not too late to reserve this situation.

"It's not too late to stop them, at any point we could remove their tax breaks - and that's what the petition was about, calling on the budget next week to remove their tax breaks.

"We can still stop that tidal wave of global finance that is targeting Ireland, and we can cool it down and we can still make our housing market affordable.

"But each year it goes on... you are locking in probably 8,000 homes a year into this unaffordable housing institutional investor system".

Rory Hearne: Stamp duty to stop investment funds 'has to be extended to apartments'

00:00:00 / 00:00:00

    

Main image: Housing expert Rory Hearne pictured in Marino, Dublin in June 2021. Picture by: PA Images/Alamy Stock Photo/Niall Carson

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