Wednesday, 19 June 2019

Questions (53)

Richard Boyd Barrett

Question:

53. Deputy Richard Boyd Barrett asked the Minister for Finance his plans to implement new regulations of vulture and cuckoo funds to ensure that those in search of affordable homes are not losing out to international speculators; and if he will make a statement on the matter. [25589/19]

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Written answers (Question to Finance)

The key to resolving current issues, including affordable housing, in the housing market is increasing supply. This is why the Government is committed to increasing the supply of all types of housing including social, affordable and private. Institutional investors represent one aspect of the housing market and have a role in increasing supply, particularly the supply of urban apartments.

The Deputy  should be aware that a Department of Finance staff paper on institutional investment in the housing market, published in February 2019, found that property funds, real estate firms and REITs (Real Estate Investment Trusts) account for a relatively small proportion of housing transactions. In 2017, the latest year for which official data is available, such firms purchased a net 1 per cent of transacted units. However, it is clear the number of transactions from such investors is increasing. 

The National Planning Framework (NPF) identified greater apartment construction as a policy objective. Approximately 12 per cent of the national housing stock is in apartments, in comparison to many European countries where it is normal for 40-60 per cent of households to live in apartments.  Given Ireland’s population growth, a movement towards smaller average household size and greater mobility in the labour market, apartments will need to become a more prevalent form of housing, particularly in urban areas. Many institutional investors specialise in providing such accommodation.  However, as Rebuilding Ireland makes clear, professional landlord investment can only be one aspect of a multi-pronged response to addressing current issues in the market.

Introducing regulation of the investment activity of institutional investors to limit or exclude them from housing, if it is possible to do, would be likely to have the major unintended consequence of reducing supply.

Questions Nos. 54 and 55 answered with Question No. 51.