The mistakes of the seismic event that shook Irish property just over 10 years ago are long forgotten. Today, Irish developers are building blocks to sell wholesale to a single investor or pension fund.
Developers are no longer prioritising first-time buyers, but going straight for the rental market jugular and developing for pension funds.
This was again highlighted on Wednesday by a report which noted that institutional investors snapped up a record 55 per cent of all property investment transactions in Dublin in the second quarter of this year.
In and of itself, this isn’t problematic. The Irish market needs a mix of supply and a mix of the sources delivering that supply. “Mix”, however, is the key word.
While build-to-rent deserves a place in the market, as it serves an important function for transient workers and those along key infrastructure lines in areas that need workers, it shouldn’t be regarded as the be-all-end-all.
Professional approach
One positive aspect of build-to-rent is the professional approach taken by these operators to the rental market. For tenants, it means your landlord’s business is that of being a landlord - rather than a Tipperary teacher who owns a property to bolster future pension needs or pay for a child through college.
However, what we also need are apartments for first-time buyers, three- and four-bedroom houses for families and smaller comfortable houses and apartments for downsizers. All of these need to be built in relative proximity to each other so that a long-time resident of Grand Canal Dock isn’t forced to move miles out to the suburbs just to get the smaller property that now serves his or her needs.
The issue is that in the absence of different property types in these locations, we push workers on lower incomes further out of the city and exacerbate the existing rental woes.
It’s time to ensure that we get the variety of property that we need, not the single product developers want to build and sell at any given time. That requires the Government to develop policies to try to ensure that diversity is in the pipeline.
Otherwise, we can (yet again) expect to get far too much of what is perceived to be a good thing. And that can only end badly.
