Want to start the process?

Let us guide you through the mortgage process

Schedule a free consulation at info@dowlingfinancial.ie, or fill our the form and we will follow up with you shortly.

Tell us about yourself

By filling in the form, you agree to our Privacy Policy, including our cookie use.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Home truths: The story of Eoghan and the home hoovers

The big view on Ireland’s property market

Whenever Eoghan Murphy is asked about his unforgettable term as Minister for Housing, one of the first things he says is: “I changed the planning laws to enable the development of apartment blocks, which wouldn’t have been built otherwise.”

And this is totally true. Almost none of the blocks constructed since the minister made those key changes would have been built without them.

Another take on this is that he changed the planning laws overnight to enable a goldilocks investment prospect for the sort of big profit funds which are now busy commoditising city housing around the world. The sort of funds which are widely cited as being responsible for elbowing regular buyers, renters and landlords out of cities.

And how? He did it by permitting the construction of smaller homes, with less windows, stacked much higher than previously allowed and by abolishing the requirement for parking spaces.

Over at finance, Paschal O’Donohoe allowed the hugely favourable tax terms which have generated massive profits for those funds as they today mooch about the greater Dublin area, sucking up a huge chunks of entire new schemes, both apartments and houses.

At the same time both Government politicians have produced a regime which has pommelled traditional small landlords out of the market. For traditional investors (including reluctant landlords) this includes 40pc rates of tax, rent caps and a series of prohibitive regulations to govern their conduct.

The Government-favoured funds are for sure a necessary component of most housing markets. Without them, international firms coming to Ireland would now struggle to house their workforces.

But Dublin is now a clear example of what happens when funds are let loose with such ultimately favourable planning and tax terms that they completely dominate new home purchasing, and at the expense of everyone else.

We have older home owners in mature areas who can’t trade down because none of the new apartment schemes are being offered on the open market. There’s the families who can’t buy their old houses in turn. There’s the renters who can’t afford the amounts funds are charging and suffer doubly because their arrival in force raises the wider rental bar locally. There’s the first-time buyers who can’t benefit from a new three-bed semi because the funds are buying them up. There’s the small landlord who can’t compete. All laid on a plate for the funds.

Witness the Dublin Docklands Residential Report 2020 published this week by the Owen Reilly agency which asserts that funds will likely to buy every new apartment constructed in the Docklands in 2020. It says that 92pc of apartments in the area are being rented at 20pc above the average rate to non-Irish staff coming here to work at Google, Facebook, Twitter and the international banks in the IFSC. The report asserts that the Irish renter has been priced out (down to 8pc) and cannot pay the rents now being paid charged.

Presciently, it also notes that small landlords accounted for 75pc of those exiting that market over the last year during which the big fund hoover has been absolutely relentless. Thousands of homes have been acquired in the capital and in big commuter towns like Maynooth. Local estate agencies say the funds are now busy scouting for prospects in Limerick, Cork and Galway cities, where new home construction is only just getting underway in earnest.

In changing the planning laws to facilitate them, Minister Murphy acted with the sort of red tape slashing zeal that he couldn’t ever muster when it came to enabling social housing or enough affordable homes. For these he gave us the ‘Rome can’t be built in one day’ argument. Or two Fine Gael terms in office, given that the housing crisis started in 2014.

By laying on the goldilocks tax regime which has facilitated their profits and the further proliferation of their hooverings, (as well as huge salaries for their principals), Paschal Donohoe has helped tilt entire city markets in favour of the big speculators. And in the process he has fed them the home hunting punter on a plate.

The biggest joke is that until the regime created by the two ministers, the big funds wouldn’t touch residential property with a squiffy stick.

Back in the late 1990s Irish Life was busy divesting itself of its residential holdings. Its Mespil apartments disposal turned fiasco as new owners turfed long-sitting pensioner tenants into the streets (in one notable case, using dogs to do it). The golden circles cashed in.

At the time I asked Bill Nowlan (then boss of investment at Irish Life’s property fund), why it was getting out of residential when everyone needed a home? He told me it simply wasn’t worth it. Too many tenants for too much work. Instead Irish Life hoovered up shopping centres and office blocks in the 1990’s.

But in 2020 with retail troubled and office blocks offering a limited 20 year rentable lifespan, punters with increasingly restricted choices always need somewhere to live.

Two decades after Mespil Mr Nowlan has been credited as the man who persuaded Fine Gael Government to introduce the legislation that facilitated the real estate investment trusts (REITs) in Ireland. He also founded Hibernia Reit which today controls property worth more than €1.4bn, of which 11pc is houses and apartments..

The Ires Reit has sucked up almost 700 homes, apartments and houses in and around the space of a year. Urbeo has hoovered up 567 homes. Carysfort Capital/Angelo Gordon snarfed up 799. And when we throw in the other hungry home hoovers like Avestus, Patrizia, Tristan Capital, Kennedy Wilson, IPUT and once again, our old friends Irish Life, it totals more than 4,000 new homes in greater Dublin alone that the Murphy/O’Donohoe enabled fund hoovering machine has snorted up in the last year.

About 6,000 new properties were built in Dublin in the same period. Today Irish developers have become the clients of the home hoovers.

Ministers Murphy and O’Donohoe, take a bow.

Photo by Gabriel Ramos on Unsplash

Latest news

Things worth noting

  • Mortgage holders here still paying double Euro average

    MORTGAGE rates in this country have fallen below 3pc for the first time in years. But there is scope for much deeper cuts, mortgage experts […]

    Read more

  • Revolution in fintech keeps the bankers awake at night

    Shake-up: Revolut and other fintech firms are forcing banks to increase their tech focus I was more than a little surprised at the response I […]

    Read more

  • AIB was always going to lose battle – it’s just a pity it waited so long to concede

    AIB was always on to a loser trying to defend its actions in denying 6,000 customers tracker mortgages. The bank tripped itself up and was […]

    Read more

  • Pensions reform should be high on everyone’s political agenda

    Graying vote has set political parties a-jitter hence the ill-judged promises. Pensions have became the unexpected issue of the election. And just for once, it is […]

    Read more

  • The changes still needed to tackle the banks’ bad management cultures

    Regulation: Unlike the UK authority, the Central Bank of Ireland does not have competitional law enforcement powers, an issue which deserves to be reconsidered Banking […]

    Read more

  • Paul Joyce: Mortgage arrears have been ignored but not solved

    Housing, homelessness, and healthcare have justifiably dominated the election so far. But one aspect of the housing crisis, however, that has received little attention is […]

    Read more

  • Typical household wealth has risen to €184,900 – but renters are losing out

    The wealth of households has shot up due to rising property values. But renters have very little wealth, according to figures from the Central Statistics […]

    Read more

  • Most people unaware about credit card interest rate they are charged

    The majority of Irish credit card users are unaware of the interest rate they pay, or how it is applied. And even those who say […]

    Read more

  • Divorce: what happens to the family home?

    For parting couples with property to divide, it’s complicated. When love leaves the building, what happens to the home? For most, the family home is […]

    Read more

  • Frank McDonald: Housing policy a litany of failure

    Current housing policies benefit wide array of monied interests Whoever forms the next government will have to deal with Ireland’s utterly dysfunctional housing sector and […]

    Read more

  • First-time buyers drive growth in mortgage values and volumes

    Banking & Payments Federation Ireland publishes figures for fourth quarter of 2019 First-time buyers drove increases in the volume and value of mortgage drawdowns during […]

    Read more

  • Housing crisis: What the rest of the world can teach Ireland

    High-densities, smart rental systems and container living – just some of the ideas we could adopt LOW-COST RENT Vienna, Austria Among the most discussed ways […]

    Read more

  • Mother (93) has right of residence upheld despite judgment against son

    Any failure to properly provide for Eithne Ryan ‘lies squarely’ with her son, says judge A 93-year-old woman is “perfectly entitled” to continue residing at […]

    Read more

  • Housing crisis: Seven solutions to Ireland’s biggest problem

    Cut building costs, incentivise buy-to-rent and overhaul property tax, experts advise ‘The Housing Fix’ is an Irish Times series exploring solutions to Ireland’s housing crisis […]

    Read more

  • Fianna Fáil may have just pressed the pause button on the property market

    The party’s new SSIA may cause a significant number of housebuyers to put their plans on hold for an unspecified period The man who is […]

    Read more

  • Court approves debt for equity swap insolvency arrangement

    Decision is first to be approved by High Court involving a debt for equity swap The High Court has approved a personal insolvency arrangement (PIA) for a […]

    Read more

  • Record €60m debt write-off for former quarry operator gets High Court approval

    A former quarry operator has had a €60m debt write-off approved by the High Court – the largest ever under personal insolvency legislation. Enda Patrick […]

    Read more

  • State-backed mortgage scheme hikes interest rates steeply despite bank cuts

    The interest rate on the Government’s Rebuilding Ireland Home Loan product has been increased massively. Rates have shot up by up to 0.75pc at a […]

    Read more

  • Home truths: Big time housing promises without taxes are hollow

    What can you get for €16bn these days? Well €16bn is the total amount estimated that Irish people will spend online this year. The Consumer […]

    Read more

  • One in 10 mortgage arrears cases involve separated borrowers – BPFI

    Banking lobby group calls for State to introduce measures to help separated borrowers. About one in 10 mortgage arrears cases involve borrowers who are separated, […]

    Read more

  • In your pocket: Switching mortgage can bring major savings

    Rates are falling and lenders are keen to offer better deals – it’s easier than you think. Up to 160,000 Irish families are out of […]

    Read more

  • Mortgage interest rates dip but remain more than double euro-zone average

    Central Bank statistics show weighted average interest rates on new mortgages was 2.9% in November. Interest rates on mortgages taken by Irish consumers were lower […]

    Read more

  • New buyers pay €2,000 a year more than rest of eurozone

    RIP-OFF mortgage rates in this country are costing new home buyers €2,000 a year more than our European neighbours. New figures from the Central Bank […]

    Read more

  • Pensions deliver decade-best growth of 20.6% in 2019

    Zurich Life tops peers as funds recover from calamitous end to 2018. Irish pension funds delivered bumper returns in 2019, making it the best year for investment returns in […]

    Read more

  • Another year of dysfunction ahead for Ireland’s property market

    Looming general election and UK-EU trade talks add to uncertainty for developers. With the new year now a week old and a raft of predictions […]

    Read more

  • Responsible Homeowners Betrayed

      Thousands of responsible homeowners have been betrayed by the sale of their mortgages by PTSB into a bond fund which will be serviced by […]

    Read more

  • Revealed: Ireland’s most expensive streets and their €2m plus homes

    Daily growth of €15m in value of housing stock fuelled by new supply rather than increasing prices, writes Wayne O’Connor A leafy Dublin street sandwiched […]

    Read more

  • Harsh austerity ‘imposed on Ireland’ by Berlin, says ex-official

    Republic caught in crossfire between Germany and other bailout states   Ireland was hit with unnecessarily harsh austerity measures a decade ago at Berlin’s behest, […]

    Read more

  • Value of residential property in Ireland up by 5.3bn euro in last 12 months

    SEVEN HUNDRED AND fifteen properties worth €1 million or more have been sold in Ireland so far this year, according to the latest Wealth Report from […]

    Read more

Want to start the process?

Let us guide you through the mortgage process