McGrath claims Sinn Féin policies would impact supply of new homes

The supply of new homes would fall if Sinn Féin policies were adopted, Minister for Finance Michael McGrath has told the Dáil.

Mr McGrath said the party was seeking to create an environment that was “unfriendly” towards private investment needed to build new homes.

The Fianna Fáil TD was responding during Leaders’ Questions on Thursday to Sinn Féin deputy leader Pearse Doherty, who raised the latest rental index report from the Residential Tenancies Board (RTB) for the third quarter of 2023, which showed a continued rise in rent for both new and existing tenancies.

Almost 30 per cent of new tenancy rents across Ireland were more than €2,000 per month in the third quarter of last year, while in Dublin more than half of new tenancies were in excess of this figure.

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Mr Doherty said the rental sector was clearly in crisis while the Government was continuing to say “they’ve turned a corner” in relation to housing. He said there was growing evidence landlords were breaching caps in rent pressure zones and asked what would the Government do about it.

“You’ve done nothing so far, and workers and families desperately need relief,” he said.

The Sinn Féin TD said his party would ban further rent increases for a period of at least three years while putting a month’s rent back into renter’s pockets, as well as “dramatically increase” the supply of social, affordable and cost rental homes.

In response, Mr McGrath said the report was not a barometer of compliance with RPZ legislation because it captured all tenancies, including those which were outside the rent pressure zones. He said it also showed that rent levels for existing tenancies were about 18 per cent below those for new tenancies.

Mr McGrath said compliance with rent pressure zones was a function of the RTB and they were “active in that regard”. He said where breaches were taking place, they should be reported to the board, which would carry out enforcement work.

Mr McGrath added the reason why rents were rising was because of a “mismatch between supply and demand” but significant progress was being made in homebuilding, with 32,700 homes built in 2023, a 10 per cent improvement on the previous year.

The Minister said currently at least €13 billion of capital was needed to build over 30,000 homes a year.

“The State is providing €4bn to €5bn of that, we are likely over the period ahead to revise upwards the housing targets in Housing for All [plan] and that will mean much more capital needed, perhaps up to €20bn a year on average over the next number of years to build the homes that we need,” he told Mr Doherty.

“You are seeking to create an environment that is unfriendly to that investment, that will result in that investment stalling and that ultimately will impact on the supply of homes.”

Labour leader Ivana Bacik said the RTB report showed there was clearly an issue with “flagrant breaches of renting law” if rents were increasing in RPZs.

Ms Bacik said Ireland was an outlier in the lack of protections given to renters and asked when would homes be built at “the scale we need”.

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