Government vows to act as investment funds buy up whole estates
Mullen Park estate in Maynooth, Co Kildare. The 170-home estate has had 135 homes bought by Round Hill Capital. Picture: Eamonn Farrell/RollingNews.ie
The buying up of whole estates by large investment funds is “undesirable” and the Government is moving to prevent it from happening, Tánaiste Leo Varadkar has said.
Controversy has erupted since it was reported that a global property investment firm with a €1bn war chest has pushed out first-time buyers by purchasing most of a 170-home estate in the commuter belt.
The reported that the developers of the Mullen Park estate in Maynooth, Co Kildare, had been marketing new homes on the estate to private buyers since last year, with around 35 sold so far.
A real estate investment trust (REIT) called Round Hill Capital has now agreed to buy up to 135 three- and four-bed homes on the estate so that they can be put on the rental market.
The homes were on sale for around €400,000, meaning that the value of the deal could be around €54m.
Mr Varadkar said today: “I know there's been a lot of concern expressed recently about investment funds buying whole housing estates. I think that's undesirable.
"The Government is going to have to act on this and I know [Housing Minister Darragh] O'Brien and [Finance Minister Paschal] Donohoe are working on it.”
He said the Government has already discussed this matter in light of a change in recent times about these large funds.
“But we've seen a change in recent months with investment funds buying whole estates or parts of the states. It was never intended that they would enter into that part of the market, or take away properties that could be bought by first-time buyers or upgraders or even affordable housing bodies.
"But it's something that we've discussed to Government, and we're going to have to come up with a solution to that because we can't see that continuing."
Mr Varadkar said he is “not conceding” the fact that it will be 2025 before the State sees 33,000 homes built every year.
He said Covid-19 had a severe impact in terms of house building but capacity could “ramp back up quickly”.
Opposition parties have said the block purchase of 135 homes in the new development in Kildare is just the tip of the iceberg when it comes to investment funds hoovering up housing supply.
Social Democrats housing spokesman Cian O’Callaghan said the same REIT that block-bought the entire estate in Mullen Park in Maynooth also recently acquired 297 apartments in Northwood in north Dublin and 112 family homes in Hollystown, Dublin 15.
That REIT has a €1bn war chest to make property acquisitions in Ireland. “First-time buyers, who have scrimped and saved for deposits, don’t stand a chance,” he said.
“Other investment funds are also swooping in and purchasing homes en masse — some that have been constructed and others straight from plans. House prices are already increasing, because of depressed construction due to Covid lockdowns.
“Members of Fianna Fáil have been wringing their hands about the intervention of investment funds in the housing market.
"Someone should remind them that Fianna Fáil holds the housing portfolio in this Government. Talk is cheap. It’s time to act,” Mr O'Callaghan said.
Some 33,000 homes a year need to be delivered, but the Covid-19 shutdown could result in completions of between 12,000 to 14,000, Mr O’Brien has admitted.
