When Paschal Donohoe announced on Budget day that he intended to raise the rate of stamp duty on commercial real estate transactions from 2pc to 6pc, he sought to justify the decision by arguing that the property industry had recovered to the point where it no longer required the support the State had provided during the financial crisis.
While the Finance Minister's assertion in relation to the health of the country's real estate sector may well have been correct, his department's prediction that the higher rate of stamp duty will garner €376m in a full year to fund proposed expenditure in other areas will more than likely prove to be hopelessly optimistic.
Put simply, now that the number and overall value of transactions in the commercial property industry has returned to more 'normal' levels of activity following several years of major loan portfolio sales by Nama and distressed banks, Mr Donohoe will find there is far less to be had in the way of stamp duty receipts.
For even though the property market is set to see the continuing disposal of individual assets from within the portfolios acquired by private equity and so-called 'vulture funds' at the bottom of the cycle, the combined value of these transactions in 2018 will come nowhere near matching the near-record €4.5bn in activity recorded in 2016.
Leaving aside whether or not the Finance Minister will receive the stamp duty monies he has pencilled into his projections, one might ask why this should be raised in the context of the outlook for the commercial property market in 2018.
To put it bluntly, stamp duty and the inordinate focus on it, both on Budget day and in much of the post-budgetary analysis, very neatly captures the paucity of the Government's thinking when it comes to issues relating to the functioning of our property market.
Sure, we had the other 'Big Bang' budgetary announcement of a plan for the establishment of Home Building Finance Ireland (HBFI) - an agency which Mr Donohoe told the Dáil will ultimately provide €750m of debt financing to developers on market terms.
But beyond that rather grand pronouncement last October, precious little has been said since about HBFI.
We haven't heard an awful lot either on the outcome of newly-minted Housing Minister Eoghan Murphy's review of his predecessor, Simon Coveney's 'Rebuilding Ireland' plan. This despite the fact that Mr Murphy appeared, up until the recent crises involving former Tánaiste Frances Fitzgerald and Brexit, to be out every other day sounding off on the issues he would address with a view to speeding up the delivery of new and affordable housing. The Minister's recent re-emergence with a proposal that would permit the conversion of vacant space in retail and other commercial units to residential accommodation without the requirement for planning permission is as Sir Humphrey was wont to tell Jim Hacker in 'Yes, Prime Minister' a "very brave" and "extremely courageous decision".
Mr Murphy's 'bravery' was in evidence once again just before Christmas with his proposals to alter the planning guidelines for apartments in cities across the State. While a case for easing height restrictions and removing the requirement for basement car parking might be made, the devil will be in the final details, which we may yet have to wait a long time to hear.
But while the Government continues to tinker with and dither over property, a sector which traditionally has been treated as a cash cow to be milked by the Exchequer in the good times, the industry itself is adapting and innovating to overcome the challenges of the post financial crisis era.
As we come to the end of 2017, there is no doubt that residential development is the most crucial property sector both for the economy and society as a whole.
Unfortunately, the consequences of the boom and bust have served to either remove numerous of the country's developers from the industry altogether, while leaving those who came through the crash seeking finance at double-digit rates of finance from international lenders.
Neither case helps with delivery of new homes at the required scale or at a price that can be borne by a market dictated by the Central Bank's new lending restrictions.
Given those constraints and with the country's 'pillar banks' of AIB and the Bank of Ireland understandably cautious and constrained when it comes to lending for property development, it was only a matter of time and of necessity before Ireland would see the emergence of new publicly-listed structures with the ability to raise funds directly from investors, and of the Build-to-Rent (BTR) model which is already well-established internationally.
Unsurprisingly, the arrival of PLC developers Cairn Homes and Glenveagh Properties has been met with a huge response from investors, who are anxious to cash in on the housing market following a decade in which virtually no new homes were built.
In the case of Cairn, its flotation on the London Stock Exchange in 2015 proved to be major success. Having offered 400 million shares to the market a €1 apiece, the company saw its market capitalisation swell to €429m following its IPO.
Cairn, which is headed up by CEO Michael Stanley and chaired by former KBC Bank Ireland boss, John Reynolds, enjoys a huge advantage over the country's private developers, thanks to the financial backing of its shareholders, and by virtue of the land banks it has across Dublin and its commuter counties of Wicklow, Kildare and Meath.
All told, the Project Clear portfolio lands which Cairn acquired from Ulster Bank for a relatively low consideration of €378m have the capacity for over 14,000 residential units.
Earlier this year, the company hit the headlines when it paid €107.4m for the 8.5-acre 'Project Montrose' site at RTÉ's Donnybrook headquarters. Cairn hopes to deliver approximately 500 apartments and 20 houses on the lands, for which it paid a premium of €17m over the €90m offered by rival bidder, developer Michael O'Flynn.
The successful Cairn Homes bid for the prized RTÉ site was facilitated by a €50m loan provided by Activate Capital - a company supported by the State-controlled Irish Strategic Investment Fund (ISIF) and global investment firm KKR.
Just two years on from its London debut, Cairn sought and has been granted admission to the Irish Stock Exchange. With its market capitalisation coming in at just over £1.41bn, the company was formally admitted to the benchmark 'ISEQ 20' at the close of business on December 15.
The ISEQ 20 comprises the 20 companies with the highest trading volumes and market capitalisations.
Given the meteoric rise in Cairn's fortunes, few were surprised to see the arrival last month of another listed Irish homebuilder.
Backed by US private equity giant, Oaktree, Glenveagh Properties, saw orders for €550m in shares received within 12 hours of being offered to investors on the Dublin and London stock exchanges.
While Glenveagh's initial portfolio comprised property acquired by Oaktree during the crash and the assets of Kildare-based developer, Bridgedale, the company's capacity has since increased with its completion last month of a deal to acquire a portfolio consisting of 11 sites in Dublin, Wicklow, Kildare, Limerick and Cork with potential for up to 1,319 new homes.
Earlier this month, the company bolstered its land bank in the capital with its agreement to buy a two-hectare site at East Wall Road in Dublin's north docklands. Glenveagh is set to pay more than €40m for the site, which it says has the potential to accommodate 450 apartments, subject to planning approval being obtained.
To date, the company, which is led by executive chairman John Mulcahy, CEO Justin Bickle and chief operating officer Stephen Garvey, has spent over €123m on sites, and is aiming to build at least 1,000 homes a year by 2020.
While there are rumours circulating within the property industry that 2018 will see the emergence of another PLC homebuilder, Cairn and Glenveagh will still face competition from a number of the country's most experienced private developers.
Among those leading the charge in this regard are Michael O'Flynn, Sean Mulryan, Paddy McKillen, Bernard McNamara, the Cosgrave Property Group and Gerry Gannon's Gannon Homes.
Leaving aside the intense competition for a share of the new homes market for owner-occupiers, there are other developers and property companies focused solely on servicing the country's growing residential rental market.
The strategy of companies such as Ires Reit, Kennedy Wilson and Hines Ireland would appear to be eminently sensible judging by a recent report from CBRE which noted how in 2016, 497,111 households - or nearly 30pc of the population - is now renting. The figure represents an increase of 4.7pc on 2011.
CBRE also analysed the nature of occupancy in Ireland by age group. This analysis showed that younger sections of the population have a higher propensity to rent, with around 65pc of the Dublin population aged 25-39 renting from a landlord. Only 26pc of people within the same age segment own their home, with the remainder renting from a local authority.
Quite apart from the preference younger cohorts of the population have for renting, a combination of rising house prices and the Central Bank's tighter mortgage-lending rules is putting home ownership beyond the reach of more and more people, making Ireland a fertile territory for major institutional developer landlords.
Ires Reit has already capitalised on the growth of the rental market.
Since being launched on the Irish Stock Exchange in 2014, the company has established itself as Ireland's largest private residential landlord with 2,540 apartments distributed across 20 Dublin developments including Beacon South Quarter in Sandyford, Tallaght Cross West, Charlestown in Finglas and Elmpark Green on the Merrion Road.
Clearly aware of the growing opportunity presented by young couples who are unable to secure a mortgage to buy a traditional three or four bed Semi-D, Ires recently announced its purchase for €7m of a 4.5-acre site with planning permission for 99 new homes at Hansfield Wood in Clonsilla, west Dublin.
Due for delivery on a phased basis from next month onwards, the Ires development is part of the wider Hansfield scheme which is being built by Garlandbrook and contractor Newline Homes. Kennedy Wilson, for its part, recognised the opportunity in Ireland's rental market almost immediately after its arrival here in 2011.
Having acquired the Bank of Ireland's property business, the Los Angeles-headquartered real estate giant, in partnership with Fairfax Financial, bought the Alliance Building, a 210-unit apartment development located next to Google's European headquarters on Barrow Street for €40m in 2012.
While Kennedy Wilson's Irish operation is inarguably associated more with its ownership of prime commercial assets such as the iconic Shelbourne Hotel, the four-star Portmarnock Hotel, Stillorgan shopping centre, and its development of Capital Dock in the Dublin Docklands, the company maintains a laser-like focus on the Build-to-Rent (BTR) residential market.
Speaking at the recent launch of the latest phase of Kennedy Wilson's 845-unit scheme at Clancy Quay at Islandbridge in Dublin, the head of the company's Irish operations, Peter Collins, said Kennedy Wilson wanted to more than double the number of residential units it has available to let in Ireland to about 5,000 within the next four years.
Kennedy Wilson currently has 2,100 units either built or subject to planning permission here.
Hines is another US-headquartered real estate giant which has shown itself to be acutely aware of the potential of Ireland's nascent build-to-rent residential sector. Best known for its acquisition of, and plans to develop the former Dame Street headquarters of the Central Bank, Hines Ireland recently submitted a plan for 1,269 BTR apartments at the new town centre it is developing in the first phase of its massive Cherrywood residential and commercial scheme in south Dublin.
Former estate agent turned developer Pat Crean for his part is on the brink of sealing Ireland's largest-ever Private Rented Sector (PRS) public offering.
The Marlet Property Group chief is in the final stage of negotiating a €450m forward-funding deal with London-based Round Hill Capital for the 'Dublin Living' scheme, a portfolio of 1,170 apartments across four sites at St Clare's and Mount Argus in Harold's Cross, Carriglea on the Naas road and on the former CIE lands in Cabra.
The strength of the case for build-to-rent is compelling both in the short and longer term. As a model, it allows a developer to commence construction on a large scale rather than build out a site on a phase-by-phase basis, where the commencement of each phase is reliant on the sale of units in the previous phase.
Thanks to the promise of full occupancy levels in the Irish market, the build-to-rent model is set to attract significant support from institutional investors such as pension funds into the future as the rental incomes derived from letting residential units in large numbers provide steady returns over many years, and through the peaks and troughs of economic cycles.