AS A COUPLE attempting to buy our first home in Dublin, I find it astonishing to witness at first-hand the level of demand and the resulting race to secure a property.
This includes cut-throat tactics and dirty bidding wars. With no visibility of bids, this leads to ever-increasing property prices.
The demand is so high due to the shortage of properties that it brings feelings of desperation which can lead to panic purchases.
So often people are getting into massive debt to buy a house in an area they never wanted to live in, far away from their family and friends.
I was looking into the reasons why this is happening and the same problems keep arising.
Dublin is awash with vulture funds, property hoarders and now a worrying trend of major developers building entire complexes to sell to a single landlord for rent.
Desperate to buy
For a few months now, myself and my wife have been trying to buy a home to live in with our child.
Initially, our budget was €380k-€400k but since we can’t seem to secure a home within that price range, and we also pay big creche fees, we have had to move in with my wife’s parents to try to save more money.
This whole ordeal really started around seven years ago when the small one-bed apartment we were renting changed hands and the rent increased from €975 to €1500.
Our rent increased every year since and we were chasing our tails, moving around between different rental properties – so now we are just desperate to buy.
After going through the hell that is the rental property market in Dublin we are now beginning the journey to the hell that is the buyer’s property market.
Disheartened isn’t even the word. I’m exhausted and terrified of the process I see unfolding before me.
Like us, most of our friends are caught up in bidding wars. One couple we know had to borrow from family at the last minute, to pull together an extra €10k on top of their massive mortgage to secure a home.
We have looked at new builds around the Dublin 12 and Dublin 16 areas. There are a lot of new builds going up but every time we get there, we are informed that they are all gone and that we should put our names down for the ‘next phase’.
We have attended numerous viewings on Saturday and Sunday mornings and they can only be described as a free for all: the crowds gather, then people start to push past each other. Those viewings are extremely stressful and exhausting.
The panic buying that ensues is reminiscent of the bread shortages during last year’s snow.
So we have also started looking at ‘doer uppers’ but the average cost of extension work in Dublin is €2,000 per square metre, meaning it would add at least an extra €80k on any old property to bring it up to standard.
What is the problem?
Dublin is a haven for vulture funds. They know that the demand for property is high and that the cost of rent is high so they nest here sitting on their golden eggs.
Last Monday, I read an article in the Irish Times that said that one of the biggest developers in Ireland, Cairn Homes, is offering 282 apartments for sale to a single landlord buyer for €90 million, all of which will be rented.
Cairn sold a block of 120 apartments in Hanover Quay to a single landlord last year and they have also received planning permission for 377 dwellings on Griffith Avenue, 107 dwellings in Rathgar and 221 dwellings in Blackrock, all for the purpose of sale to a single landlord to rent them out.
The fact that the largest developers of housing in the country are selling off whole apartment complexes to professional landlords will obviously impact supply for those of us who are trying to buy a home.
The problem is that the rents that investors can demand in Dublin now, are so ludicrous, outstripping Paris, Amsterdam and Stockholm - that this model is very lucrative for investors.
The rent gouging happening in Dublin hurts renters and now it also means there are fewer places available for potential purchasers as these investors and professional landlords snap up the new builds at scale.
It is often suggested that these professional landlords will be better for renters, offering a more stable rental service than the smaller landlords we are familiar with in Ireland. But if you take a look at what is happening in Berlin, it is the biggest commercial landlord company that stands accused of driving up rents and property prices there.
Another serious problem is the lack of social housing being built and it has emerged recently that some of the high profile, new build apartment complexes in the capital will not include the mandatory 10% social housing either.
Ireland’s tallest apartment block, the 190-apartment Capital Dock development recently completed by Kennedy Wilson on Sir John Rogerson’s Quay, will include no social housing, according to a recent article.
Dublin’s Docklands is just one example. People from across the city are being driven out of their local communities by the housing crisis.
Solutions
Back in mid-2017, Senator David Norris addressed the Seanad in relation to vulture funds. “Why were they allowed in this country?” he wondered.
The funds would “create a potential avalanche” of people into homelessness, he said.
With 10,000 already homeless throughout Ireland how much worse can this problem get before we take action?
It is almost impossible to buy a house, private rental prices are ludicrous, homelessness is out of control and we desperately need social housing. What should we do?
Well back in 2017, Senator Norris called for a referendum on housing and that is exactly what people in Berlin are now demanding.
The city has a degree of autonomy within the German federal system and there is widespread support in Berlin for the proposed referendum.
The question asked of citizens in Berlin will be – should the city ban commercial landlords with more than 3,000 homes and expropriate those homes for social housing?
According to opinion polls, a majority of voters seem to back the plan.
It’s hoped that if that referendum is successful, it will help to establish a precedent within the EU of treating housing as a human right rather than a commodity, so it could have a knock-on impact for other cities.
The campaign in Berlin arose from concerns about the rising cost of living and rising rents there, but it is worth pointing out that the cost of living here is a lot higher than in Berlin.
The average rent in Dublin is twice that of Berlin
Ciarán Connolly is a manager in Vodafone. He is also a disheartened, demoralised and exhausted potential home buyer who is tired of the government’s lack of action to address the housing crisis.
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