Eoin Ó Broin
Question:113. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage his views on the purchase of 300 new homes, including houses and duplexes by a company (details supplied). [12317/22]
View answerThursday, 3 March 2022
Questions (113)
Oral answers (6 contributions)
I am sure the Minister read in the newspapers two weeks ago that Orange Capital Partners have announced a forward purchase agreement of currently developed stock in three locations. These are in Cherrywood, in my constituency at Adamstown and in the Minister's constituency at Portmarnock. Many of these developments include not only apartments but also duplexes and family homes. Does the Minister accept that the measures undertaken by him and his colleague, the Minister for Finance, Deputy Donohoe, to stop these institutional investors swooping in and snapping up family homes have failed?
I do not, frankly. I cannot comment on any individual case; I am not privy to private negotiations and nor should I be. I cannot confirm either whether the reports are 100% accurate. What I will and can say very clearly regards the measures that this Government has introduced.
We have committed to introducing a form of owner-occupier guarantee - this has been done - to enable local authorities to specify the proportion of houses and duplexes in a development for owner-occupiers. This is intended to build on the existing higher rate stamp duty measures that the Minister for Finance introduced and restrictions on planning permissions introduced in May 2021 that I brought forward by way of section 28 guidelines on the regulation of commercial institutional investment in housing. The current guidelines ensure new own-door homes and duplex units in housing developments can no longer be purchased in bulk by institutional investors in a manner that causes displacement of individual purchasers or social and affordable housing, including cost rental properties. It is really important that people understand this.
Analysis and data - rather than reports - suggest that with the changes made by me, the Minister for Finance and this Government in 2021 on the purchase of single family residential units, the proportion of such purchases fell from 11% of residential deals in 2020 to 2% in 2021. This is coupled with the fact that more than 30% of the 46,000 homes purchased in 2021 were bought by first-time buyers.
I am satisfied the Government's actions to increase home ownership for individuals and families are starting to work.
That is no comfort to the people in Portmarnock in the Minister's constituency or in Adamstown in mine, who today will not be able to avail of any of these homes because they have been purchased by an institutional investor. In the same article in the Irish Independent, the fund said that "it is irrelevant what we pay for them." It does not matter that the Government has increased stamp duty by a modest 8%. These funds will make such a return at current market rents over the 50-year period that this fund, for example, says it will remain at these locations, that a modest increase in stamp duty will be quickly recouped by higher rents. Likewise, the planning changes the Minister has introduced in the main will only apply to future planning applications. The 80,000 live planning applications that are in the system are open game for these institutional investors. In terms of what is coming down the pipeline this year, next year and the year after, the Minister's measures have failed. Again I ask him what he can say to reassure those people looking to buy such properties in our constituencies that the measures he undertook last year are having any impact in squeezing out these funds.
Deputy Ó Broin cannot ignore the facts. He would say they have failed because that is what he would say. There is no question. He would never come in and say that any Government measure is working because his go-to point is to say that it is failing, everything is wrong and nothing is working. That is what he does. He is the one who said in his interview with The Currency and elsewhere that he meets these private investors and developers regularly. He has met Johnny Ronan and all these guys and he talks to them about investment and the need for investment. The Deputy is the one who said that in an interview, so that is fine. Maybe he knows what is happening in Portmarnock or Adamstown. I am telling him we need to increase the overall supply and we have brought in measures. The analysis of those measures has shown a reduction from 11% to 2%. They are the facts. That is what is happening. There will be investors in the market but the Minister, Deputy Donohoe, has brought in a very significant increase in stamp duty and I have brought in planning changes that affect all future planning permissions. That is working and it is starting to work.
The facts flatly contradict what the Minister is proposing because we know from the BNP Paribas report that a quarter of all purchases last year were by non-households. The Minister is right that some of those were approved housing bodies and local authorities but the vast bulk of them were institutional investors. They are now not just buying up new homes through forward purchase agreements but snapping up significant numbers of second-hand homes from which HAP and RAS tenants have been evicted and then leasing them back to the local authorities at extortionate prices.
Of course I meet everybody. How else can I do my job properly? I cannot do it by not meeting people. The difference between the meetings the Minister has and the ones I have is that I meet these organisations to make very clear that policy under Sinn Féin Government would change and funds would not be able to buy either houses or apartments. The measures we would take would push them out of the market. Instead, we would use public funding to buy those same developments for social housing and large volumes of affordable homes.
Again, what reassurance can the Minister give to his constituents in Portmarnock that there will not be more of these developments bulk-bought by institutional investors because they can pay over the odds and price young families out of the market?
This Government has banned bulk buying. We have changed planning and brought in an owner-occupier guarantee. For the first time in planning we have recognised owner-occupier as a tenure of housing. We are doing that and have done it. I am at a loss to understand what Sinn Féin housing policy is. I listened to the Deputy a few weeks ago talking about bringing in 10,000 vacant units in one year, which would supplement his magic 20,000 homes he wants to deliver. We are grounded in reality. The reality is that what we want to do and what we are doing is increasing housing supply on the public side, where we are going to build more social homes this year than ever before. We are bringing in affordable housing. We have cost-rental units in place. Yes, we are increasing private supply too. We need to get up to 33,000 per year. How we do that is by delivering and by building, not by objecting and blocking.