Lack of Irish housing is becoming a home for buyers and investors alike

Philip Slatter, a 35-year-old accountant living on the outskirts of Dublin, has been looking for a home for three years, first on his own and then with his partner and three children in the family.

The severe shortage of apartments in their area has stimulated the growth of property prices. Property often costs 20,000 euros or 30,000 euros less than the price they offer. Average selling price in Dublin is about 396,000 euros.

“I think I will have to win the lottery,” Slatter said of his chances of having a home.

Dysfunction has been a defining feature of the Irish property market for decades, during the period of sharpest growth in 2000-2010, as prices spiraled out of control and plummeted in the ensuing crash.

Now the country is in a different kind of crisis.

Ireland expects to build just 21,000 homes this year, as tighter lending conditions coupled with coronavirus delays will boost supply below the more than 90,000 homes a year built at the peak of 2006.

Ireland expects to build just 21,000 homes this year, down from 90,000 built in the peak year of 2006 © Chris Ratcliffe / Bloomberg

The result is: deficiency settlements that could last for years, from single beds in downtown Dublin to suburban family homes. Meanwhile, until their fortunes change, Slater lives with his parents, his partner, and the children live with them.

The situation is far from the easy money days of the mid-2000s, which predicted the 2008 financial crisis. This was stated by Dermot O’Leary, chief economist at Goodbody.

Mortgage rates today leave buyers’ budgets “so low.” “It excludes a significant group of people from buying a house,” he said. As for the builders, the availability of credit բարձր The high cost of construction in Ireland compared to the selling price makes it difficult for them to increase production to 35,000 units per year required for the market.

The lack of housing in urban cities near Dublin has not helped the US investment fund Round Hill Capital, which seized 135 of the 170 homes for sale in one construction in April. That was it the final straw for the wider community, the government և many families, couples և individuals struggling to find suitable homes.

The ruling coalition responded by imposing a 10 percent stamp on buying 10 or more homes every 12 months.

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Politicians are debating whether stamp investment funds should now pay for a large number of home purchases, whether it is possible to extend them to apartments.

Ministry of Finance he said This will offer a “substantial incentive” to investors who “deprived first-time buyers of the opportunity to buy a home.”

Is this the best approach to the problem? An open question remains a hotly debated political issue. “You had a heated media coverage on a certain topic, you developed a policy within two weeks. That’s not where housing policy should work, “O’Leary said.

The problem is not only with Ireland. In Germany, scarcity of supplies and sharply rising rents have made housing one of Berlin’s most contentious issues, as highlighted recently when VonoviaGermany’s largest homeowner, combined with a € 18 billion merger competitor.

In order to conclude the deal politically, the companies undertook to sell some apartments to the local self-government bodies without any payment, to make some rent freezes, and to build additional apartments.

At the same time, the Irish housing market is in a frenzy, says Andrea Whelan, a real estate agent in Dublin with Sherry Fitzgerald.

He said that in his 23 years in business, he “never had a stronger database of qualified, ready buyers”, but they had a “sense of anxiety”. “Frustration.”

The by-elections in Dublin’s Bay South on July 8 give politicians an extra incentive to consider the issue.

The stakes are highest for Fine Gael, the third-largest party in parliament and second in the ruling coalition, which could lose its seat in the polls.

Simon Harris, director of elections for Ireland’s Fine Gael party south of Dublin Bowie, said it was “really possible” for the government to use investment funds to deal with the housing market.

Leftwing Sinn Féin, the largest opposition party in the Irish Parliament, the second largest party, argues that the government as a whole needs to do much more, including taxes on additional capital gains for property investors – more socially affordable housing.

“If you sincerely believe that elections are an opportunity to send a signal to the government. “Then let’s hold a referendum on our failed housing policy,” said Eubine J. Brown, of Sinn Féin’s election south of Dublin Bay.

One of the issues is that stamp investment funds now have to pay for most home purchases, which may extend to apartments, the area where international institutional investors typically make up almost one-fifth of 2018 sales.

“The only people who build an apartment are those who are supported by international capital,” said one of the top executives of a large real estate investment company.

If so, the prospect of further government action is an unfavorable sign for both investment funds and the construction of future housing.

Jim O’Calla, one of Ireland’s ruling coalition parties, and Jim O’Calla, who is campaigning for Dublin South Bay by-elections, says raising taxes on home sales is what many in the party wanted. “Maybe we will have to reconsider,” he said.

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