Sunday 26 May 2019

Claire Murphy: 'Bulk sales and build-to-rent crucifying potential buyers'

 

Different model: The Danube Canal in Vienna where 60pc of homes are social housing, owned by co-operatives. Stock Image
Different model: The Danube Canal in Vienna where 60pc of homes are social housing, owned by co-operatives. Stock Image
Claire Murphy

Claire Murphy

There were three beautiful developments near to where we wanted to buy when we first started looking for a home.

We watched as the developments took shape, discussed how the gardens might be laid out, what direction the balconies would face.

But all three were unavailable to first-time buyers like myself and my husband.

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One development in Mount Argus was simply not open to viewing for buyers like us. It was buy-to-rent only.

There was no one to even discuss purchasing a single apartment with. The developer wanted to talk in 'blocks'.

We went to view another in the Liberties. The interior was industrial chic, designed for young couples.

We overheard one of the estate agents say to another: "How many have you sold today? I've just sold eight together there."

We knew we were out of our league.

Another development in Dundrum was listed for individual sale but early into the sales process the developer indicated that he would prefer to sell in blocks.

We shifted our focus to second-hand homes. The viewings were frenzied and we were regularly trumped by cash buyers, but at least we were competing on a smaller scale.

It's easy to appreciate why developers prefer bulk selling over individual sales and why many are now opting for build-to-rent - but the practice is crucifying potential owner-occupier buyers.

Build-to-rent apartments should not necessarily be a bad thing for the housing market. In cities like Vienna, 60pc of homes are social housing, owned by co-operatives.

These are subsidised to build homes with non-profit reduced rents and so the average rental price per square metre in the Austrian capital in 2018 was just €9.40. Dublin was listed at €19.20.

But the current focus on build-to-rent is from private investment funds. 'Cuckoo funds' are swarming around Ireland's property market where rental yields are high and growing and thousands are scrambling for a place to rent.

In a recent report on the rental market in Dublin, Knight Frank pointed out that prices, rent and supply were all pointing in a "favourable direction from an investor's point of view - the outlook remains bright".

Build-to-rent developments don't have the same planning restrictions as others when it comes to parking, storage and space.

It's a win-win investment for the cuckoos - named after the bird described as a 'brood parasite'.

Housing is going to be one of the biggest topics for politicians to address on the doorsteps in any upcoming election. It won't be long before the chickens come home to roost.

Irish Independent

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