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Rory Hearne: One year on from Maynooth controversy, the govt still backs funds over individuals

Housing expert Rory Hearne asks: A year on from the purchase of an entire housing estate in Maynooth by an investor fund, what has changed?

Rory Hearne

IT WAS JUST over a year ago when the purchase of a housing estate in Maynooth by an investor fund sparked huge public outrage. 

People felt that it symbolised the locking out of a generation from being able to buy a home or rent long-term affordably, without the worry of eviction or rent hikes.

I wrote an article at the time for The Journal highlighting how sky high rents, rising house prices, the lack of affordable housing and investor funds buying up entire estates and apartment blocks was no accident, but was actually government policy. It went viral.

The Government responded by saying it was introducing measures to tackle the bulk purchase of property by institutional investors. So one year on, what is the situation now?

Investor funds

Unfortunately, the government is still backing the investor funds, real estate investment funds, and developers over Generation Locked Out – those looking to buy a home, renters and people stuck in their parents’ box rooms.

The large global and Irish institutional real estate funds are taking over the Dublin region housing market in particular, and are expanding to Cork, Limerick and Galway.

Rents have been allowed by Government to rise so high that regionally rents are now sufficiently high to be profitable for investor funds to invest. Rents in Cork and Galway have reached what rents were in Dublin in late 2016, when we saw a growth in investor fund interest in the Built to Rent developments in the capital.

There is no sign of the Government embarking on a major affordable home building programme in Cork, Limerick or Galway and so the investor funds see continued high demand from Generation Locked Out.

The government built not one affordable home for purchase last year. This year we will see at most a few hundred affordable homes for purchase and rent being built, an ocean away from the Government’s Housing for All targets of 6000 affordable homes per year. In my view it just doesn’t want that scale of affordable housing, as that would deter the investor funds, who Government have hitched their wagon to.

Since the Government’s measures were introduced we have seen a further increase in the development of of build-to-rent only developments, and bulk purchase of new apartment blocks, where all apartments are only available to rent (at astronomically high rents), and none are available for home buyers to purchase.

A global real estate player like German fund Union Investment has pre-bought hundreds of apartments in Dublin; IRES REIT, the largest private landlord in Ireland, owns close to 3800 units; US fund Kennedy Wilson will own close to 3,300 rental apartments.

Irish real estate fund Urbeo are developing build-to-rent units and advertise a studio in City West for €1,500 per month, and a 2-bed apartment at €2,000 per month. US fund grey star bought 342 apartments currently being built on Griffith Avenue, which are being advertised for a one bed at €2,140 per month.

Darragh O’Brien, the Minister for Housing, claimed in his recent report that measures to restrict institutional investors from bulk purchasing new housing are increasing homeownership and “having an impact”.

But the devil as always is in the detail. And as they say, politics never lets good evidence get in the way of claims that policy is ‘working’.

The evidence from the CSO new build sales data for Dublin in the first three months of this year shows that 1151 newly built units were sold. First-time buyers bought just 217, or 19% of these.

In contrast, non-household purchasers (mainly investor funds and real estate investment trusts, or REITs) bought 726, or 63%, almost two thirds, of all new builds in Dublin in the first quarter of this year.

That means investor fund REITs bought over three times as many new build units in Dublin as first-time buyers over that period. How is that the promotion of home ownership in Dublin?

Instead, I see this as the obliteration of home ownership for first-time buyers.

And how can this be the case when the Minister is claiming his measures have stopped the bulk purchase of homes by investor funds?


It is because his measures excluded apartments.

In a not-so subtle twisting of language and messaging he has given the impression the new measures are stopping the investor funds, when in fact, they have left apartments completely open for investor funds to buy as they want, with no restrictions and no measures to promote homeownership of apartments.

As the Minister’s press release explains:

Apartments were not included in this measure as the focus was on protecting traditional family homes.

I highlighted at the time that it was a flaw in the policy to exclude apartments. But in fact it wasn’t a flaw – it was intended. I see this as policy being made for the investor funds. They are not interested in buying up houses. It is apartments, and large blocks of apartments, in our cities, that they want to buy up and then rent out, creating a permanent income stream for their shareholders and wealthy investors.

Also, the fact that the Government has only moved to protect so-called ‘traditional family homes’ is a deeply disturbing conservative approach that expresses a prejudice against non-traditional families.

So lone parent families, singles, couples who don’t marry or have children, etc are not protected by Government policy. They are the ones who do not have the income to buy a traditional three-bed semi or terraced house in today’s market.

In fact, it is families and singles in Dublin who are being left to the clutches of the vampire funds. But those needing most protection are being most exposed, those who cannot afford to pay the crazy prices for houses in Dublin (lower and average income workers, lone parents etc), have to rent off the investor funds, faced with impossibly expensive rents, with little prospect of owning a home.

It shows just how untrue the Minister’s claim on home ownership is. Home ownership is being promoted by Government, but not if you live in Dublin city or the wider Dublin region, and definitely not if you are single, a lone parent, or a smaller family or older people looking to buy an apartment.


Furthermore, the Real Estate Investment tax break remains in place which allows large investor funds to pay little if any tax on their huge rental incomes they make off Generation Rent, and purchase and sale of property and land in Ireland. I think the most appropriate name for the investor fund REITs is vampire funds, as they want to feed off Generation Rent into perpetuity, unlike the vultures who come into clean up the carcasses and then fly off again when they’ve had their fill.

These new corporate landlords, the REITs, are here for the long term – not to provide affordable homes, but to maximise the rent by getting as many people as possible locked into their rental properties, with no alternative but to pay their sky-high rents.

The investor funds also benefit from the Government social housing schemes – the Housing Assistance Payment and leasing. IRES REIT received more than €8.7 million in rental income from the State via the HAP scheme, in the first half of 2021, according to the Business Post.

The government’s 2021 Housing for All plan is also completely dependent on the private market, and particularly on global investor and vulture funds. Of the €12bn a year required to build the planned 33,000 homes, €10bn will come from ‘private capital sources’. Of this, ‘the majority will be required from international sources … coming from well-established investors’.

So the private market and investors are to provide 83% of new homes, with the State playing a small role, less than one-fifth of all new building.

This is history repeating itself. The causes of the current crisis is the low level of State building of social and affordable housing since the 1980s. Now we have the addition of global funds that view Irish housing as the gift that keeps on giving.

Individual buyers

There is also another issue that the Minister does not address with his new plans on bulk buying. 

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There is nothing to stop an Irish individual property purchaser buying up some of the new houses, as a pension or investment.

We know that there are people in this country, being encouraged and facilitated by financial advisors, to purchase a second or third property. These Irish homeowning investors are buying up homes across the country, turning them into rental, or short-term tourist accommodation, and are also locking out Generation Rent from being able to buy homes.

The Minister outlined that the evidence of his measure working is in the 15,883 residential units which have received planning permission with conditions restricting the bulk buying or multiple sales to a single purchaser.

But recent figures on planning permission granted for 2021 show that of the 43,000 homes granted planning permission, 26,272, or 61% were for apartments (mainly in Dublin, but also across the country) and just 9,195 were scheme housing developments for sale on the market. The remainder were ‘one-off houses’.

So just a fifth of the new supply is protected from investor funds and will be for sale to home buyers, and two thirds face no restriction by investor funds, and are likely to be mostly bought up by institutional investor landlords.

So how can the Government claim it is boosting homeownership when two thirds of all new housing supply (and is likely to be the same again this year) will be open to be bought up by investor funds and locking out home buyers?

And as apartments are increasingly built in regional cities like Limerick, Cork and Galway, watch as the investor funds, not home buyers, buy them up.

The same policies that created the current housing crisis are the ones being followed by the Government.

It’s the market, the market the market. Just wait until supply equals demand, then everyone will have affordable homes.


Investor funds will never provide an affordable supply. What good is tens of thousands of apartments that just push renters into permanent poverty and cost the government more and more in HAP?

The core of the problem is the Government has failed to do what we did in the past: build social and affordable housing on a massive scale. And treat housing as a home -as a human right – not an investment asset for hedge funds, the wealthy, and property owners.

Housing should be a home, not a pension fund.

Homes should be restricted to sell to home buyers, not multiple property owners and funds.

Rents should be reduced.

We need a State construction company set up to build on the huge public land we have – to actually build  real affordable homes on the scale needed for Generation Locked Out. 

Dr Rory Hearne is Assistant Professor in Social Policy, Maynooth University, host of the Reboot Republic podcast and author of forthcoming ‘Gaffs: Why no one can buy a house, and what we can do about it’ published by HarperCollins Ireland.

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