“THE PROBLEM IS we’re not building enough houses or apartments. Full stop,” Taoiseach Micheál Martin said today, dismissing concerns raised by the Social Democrats about an investment fund buying a three-bed, end-of-terrace house in Swords for €1.7 million.
The Business Post reported on Sunday that some houses in Castleview, an estate of 250 family homes built in the early 2000s, are being snapped up by funds for well over the asking price.
The newspaper reported that both the €1.7 million and €850,000 homes were purchased from a company, which acquired those properties in 2021 for €345,000 and €360,000 respectively.
Social Democrats co-leader Roísín Shortall said in the Dáil today that such purchases are having “a hugely distorting effect on the market”.
She questioned how first-time buyers or any ordinary buyers interested in purchasing a home in Castleview would be able to compete if funds can pay such a premium for three bed terrace homes?
Long-term leases with the state
The state is fueling such sales of family homes between investors as they are entering into long-term lease agreements with the Government, that will see these investments “enormous as they are, repaid over 25 years”, she said.
She called on the Taoiseach to apologise to the public for “misleading this house when you said investment funds should not compete for homes with first-time buyers”.
Micheál Martin took issue with her assertions, stating that parties are “distorting” the narrative when it comes to discussing problems in housing. He said investors were being made out to be big players in the housing market, when he claimed they are not.
He said the state itself is building homes, and through approved social housing bodies, are providing thousands of social and affordable homes.
Martin said the overall proportion of the number of houses that are bought in 2021 by non-household entities was 11,600 units or 20% of the total units purchased, he said.
Non-household entities includes the state, he clarified.
“When I say ‘non-household’, that 20% includes the state. It includes approved housing bodies and private companies. The state accounts for the largest single share of purchases within the non-household category, about 32% of purchases” of the non-household.
First-time buyers
First-time buyers accounted for 26% of all properties purchased in 2021, said the Taoiseach, adding that more first-time buyers bought their first home in the last 12 months than in any year since 2008.
“The state purchases are largely concentrated on houses – 66% of state purchases have been houses,” he told the Dáil.
Speaking about the case in the Business Post, the Taoiseach said: “My understanding is that fund bought from a fund. We’re not competing with first-time buyers in that case… the point being that were units already assigned to social housing, with leases of 25 years, at the time of the sale, these properties are required to remain in social housing for the entirety of their lease, therefore any subsequent sale those properties would not be in competition with purchasers.”
The Taoiseach said the debate about housing is being distorted as if the only players are institutional investors, adding “they are not, they are minority players in the overall scheme of things in terms of construction”.
“The state is the biggest actor,” he added.
He reiterated that supply is the answer in his view, stating that 35,000 to 40,000 houses need to be built each year with the state population going over 5 million and with 70,000 people coming into the country in the last year.
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