Cian O'Callaghan TD

Leo Varadkar’s pledge to construct 40,000 homes per year not credible

The State’s over-reliance on the private market to solve the housing crisis means nearly one-third of new homes are now bought by institutions, according to Social Democrats Housing Spokesperson Cian O’Callaghan.

“According to the Social Justice Ireland, the proportion of newly built homes bought by institutions increased from 5.6pc in 2010 to nearly one-third in 2019 – a six-fold increase in less than ten years.

“A large part, 58pc, of this activity came from the State, via local authorities or approved housing bodies. But, there has also been a huge increase in the proportion of homes bought by international investment funds and REITs.

“Per the report, between 2016 and 2019, purchases by the ‘financial and insurance’ sector more than doubled while purchases by the ‘Real Estate Sector’ ballooned by more than 30pc. In just three years, the average price of homes, bought by institutions, increased from €229,627 to €304,811.

“Social Justice Ireland is clear that a big driver of house price inflation is “the introduction to the market of large-scale investors with purchasing power far beyond that of households”. The government recently baulked at the opportunity to tame these funds – giving them the green light to continue bulk-purchasing apartments and slapping them with an ineffective stamp duty increase.

“The problem, at the core of the government’s housing policy, is that it has outsourced its responsibility to provide housing to the private market. Local authorities, approved housing bodies and investment funds are all competing with ordinary buyers for the meagre supply of housing that exists.

“At the weekend, Leo Varadkar announced he wanted to build 40,000 houses a year. Given Fine Gael, in government for a decade, has never even managed to reach the Rebuilding Ireland target of 25,000 homes per year, this pledge is not remotely credible.

“However, if he is serious about dramatically increasing supply, there is a way. He must abandon the government’s failed strategy of over-reliance on the private market and the State must build new homes at scale.

“According to Social Justice Ireland, the State owns enough land to provide for the construction of 414,000 homes. All we needs is the political will to get it done.”

21 June, 2021


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