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House Prices

Dáil Éireann Debate, Wednesday - 17 April 2019

Wednesday, 17 April 2019

Ceisteanna (91)

Bernard Durkan

Ceist:

91. Deputy Bernard J. Durkan asked the Minister for Finance if he and the Central Bank continue to monitor the impact venture capital companies are likely to have on the housing market in view of their increased stake in the business and the extent to which they influence rising market prices. [18028/19]

Amharc ar fhreagra

Freagraí scríofa

The Department of Finance continues to monitor all aspects of the housing market, including the impact of venture capital companies and other institutional investors. In fact, in February of this year my Department published a paper tilted ‘Institutional Investment in the Housing Market’.

The paper describes how ownership of rental properties by large scale landlords - those that own more than 100 rental units - accounted for less than five per cent of all tenancies nationally. In 2017, the latest year for which data is available, the combined property purchasing activity of property funds, real estate companies and REITs accounted for a net one per cent of transactions.

The Central Statistics Office is due to publish updated data on the market activity of all non-household buyers in the summer. Publication of this data will allow further analysis of the impact of institutional investors such as venture capital companies.

The Government’s primary response to mitigating residential price inflation is to increase supply. I understand that in 2019, the vast majority of investments made by institutional investors will be via ‘forward commit’ deals i.e. the funding or forward purchasing of yet-to-be-built stock. This is a very positive development in terms of boosting supply, particularly as the focus of most institutional investors is on the construction of apartments. As the National Planning Framework sets out, Ireland needs to increase the density of its housing stock if we are to meet our sustainability goals.

In relation to prices, the increased presence of institutional investors has coincided with a significant deceleration in home price inflation. As of February 2019, annual residential price inflation was 4.3 per cent, substantially down from 12.5 per cent in the same month last year.

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