Government under fire over investment fund activity in housing market

The Government came under increasing fire on Wednesday as Opposition parties seized on reports that entire new-build housing developments were being bought up by institutional investors as evidence of the failure of the Coalition’s housing policy.

In the Dáil, Sinn Féin leader Mary Lou McDonald accused Fianna Fáil and Fine Gael of "rolling out the red carpet" for investment funds with "sweetheart deals" of no corporation tax or capital gains tax and only minimal stamp duty.

Claiming Government policy is depriving first-time buyers of the opportunity to own their own home, she said “people scrimp and save to buy a home but investment funds swoop in to push that away from them”. She said funds with a “war chest” of up to €1 billion can gazump any buyer “because Government allows them to”.

Labour’s Duncan Smith told the Taoiseach that first-time buyers were losing out to “cuckoo funds” on second-hand as well as new properties.

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Later, the Labour Party said that it would reintroduce a Bill first proposed by now Minister for Housing Darragh O'Brien when he was in opposition in 2019 to reserve 30 per cent of new estates for first-time buyers. Senator Rebecca Moynihan said her party would introduce Mr O'Brien's "own Bill, word for word".

Social Democrats leader Catherine Murphy demanded a change in the law on investment funds and said every TD would sit in the Dáil for a weekend if necessary to pass legislation overnight: "We have to pass legislation to stop this."

Aontú leader Peadar Tóibín said that Fine Gael and Fianna Fáil are "creating a tenant class the likes that has been not been seen in Ireland since landlord times. The FF/FG housing market is pitting Reits [investment funds] against families on a daily basis in a David versus Goliath battle where there can only be one winner."

Government Ministers and TDs are increasingly alarmed that they are politically exposed on the housing issue as the pandemic recedes. The issue is also causing tension between the two main Government parties.

Young adults

At Wednesday night's Fianna Fáil parliamentary party meeting, Dublin South West TD John Lahart said young adults are returning "in droves" to their parents' houses. He said if Covid was not a factor, they would be on the streets protesting and that he would be with them. He said the Government is "drowning in the shadows of Fine Gael housing policy".

Mr Lahart also supported a call from Dublin Bay South TD Jim O’Callaghan to consider amending the Affordable Housing Bill so that buyers could only purchase a single property each.

Mr Lahart criticised Strategic Housing Developments (SHD), large scale housing projects that go directly to An Bord Pleanála for approval, which he said was a "failed policy" of Simon Coveney and Eoghan Murphy, the two previous ministers for housing before the current Coalition took power.

Mr O’Brien said the issue of global property funds mass purchasing estates was a “legacy issue” which was happening before Fianna Fáil came into Government.

Meanwhile, Minister of State for Financial Services Seán Fleming told the meeting that tax incentives need to be examined and that planning laws should also be changed to restrict the bulk buying of houses. He said funds buying up full estates represent “social engineering”.