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Tuesday 16 July 2019

Cuckoo funds have positive effect on housing: Murphy

Officials reject blistering UN attack on policy

Housing Minister Eoghan Murphy. Picture: Ciara Wilkinson
Housing Minister Eoghan Murphy. Picture: Ciara Wilkinson
Charlie Weston

Charlie Weston

The Government has defended the "positive effects" cuckoo funds have on the housing market.

Its comments were in response to a blistering attack on its housing policies contained in a report and letter from the United Nations special rapporteur on housing, Leilani Farha.

The UN had accused the Government of facilitating the "financialisation of housing" and of making "investor-centric decisions".

This is allowing multi- national vulture funds to buy up vast swathes of properties and then rent them out at sky-high costs.

Housing Minister Eoghan Murphy's department has denied housing is unaffordable and defended the Government's record on housing and protecting renters.

But Fianna Fáil housing spokesman Darragh O'Brien accused the Government of ignoring the danger signs from the activities of cuckoo funds, which bought up almost 3,000 housing units last year.

"It is clear the Government has its head in the sand over the negative impact of cuckoo funds. Instead of adding to supply, some funds are snapping up existing developments."

The UN criticism of the Government's housing policies was first reported in the Irish Independent.

In a stinging rebuke to the State's housing strategy, the UN rapporteur accused it of helping vulture funds force people out of their homes, and allowing big investors to push up the cost of homes.

"Heavy private housing investment combined with the cuts in public housing budget has been making housing in Ireland significantly unaffordable," Ms Farha claimed. This has been made worse by land hoarding.

The financialisation of housing was having devastating consequences for tenants.

The Government defended its housing policy, known as Rebuilding Ireland. It claimed in a 16-page reply that progress has been made.

Officials from Mr Murphy's office responded that it takes very seriously the issues and concerns raised, stressing housing remains a "critical priority for the Government".

A number of initiatives were highlighted including the help-to-buy scheme, the vacant levy tax and rent pressure zones.

The Government disputed assertions about houses being "significantly unaffordable". The UN said house prices were now approaching levels last seen at the height of the property bubble.

State officials said housing costs were affordable for most people.

It referenced research from the Economic and Social Research Institute which did not find that housing was universally unaffordable in Ireland.

"In fact, for many households, housing costs are not high relative to household disposable income," the department said.

However, it did concede that "high housing cost burdens were concentrated amongst particular cohorts".

"Private renters, those living in Dublin and the surrounding mid-east region and low income households are paying a significantly higher proportion of their incomes on housing payments," the Government's response acknowledged.

"Policy measures are directed towards improving affordability for these households."

Officials also disagreed with the statement that Ireland was "turning housing into an investment" which leads to "decision-making that is investor-centric, rather than tenant-centred".

The Government responded that "it is also important to recognise the positive effects that institutional investment can have in terms of the supply of housing".

This was because the activities of institutional investors were leading to the forward purchase or funding of new developments.

Irish Independent

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