Thursday 22 August 2019

Donal O'Donovan: 'Would-be buyers left stranded in cloud cuckoo land'


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Donal O'Donovan

Donal O'Donovan

Cuckoos notoriously lay their eggs in other birds' nests, where their hatchling take over by pushing the 'real' occupants over the edge. It's hard to think of a better metaphor for the Irish housing market.

This year should have brought some relief for those desperately trying to buy. Galloping house price rises have abated as fast-track planning processes bear fruit. Builders are back at work. There's a long way to go, but new homes are being built in increasingly substantial numbers. But the ground is shifting rapidly under the feet of would-be home-buyers.

Increasingly, new-build homes are not being offered for sale to ordinary buyers - at any price. In the past week hundreds of new houses and apartments in Dublin's commuter belt have hit the market but none will be sold to a first-time buyer. They're already sold or are earmarked to be gobbled up en masse by the new class of huge, cash rich, institutional landlords.

The latest sale is of 300 apartments in Citywest on the edge of Dublin city.

Average prices are €319,000, as close to affordable as new builds in Dublin get. First-time buyers won't get a sniff.

For builders it is a no-brainer. One clean sale to a single buyer is cheaper, faster and less risky than selling homes individually.

So far it's largely in Dublin, but investors are talking about expansion into the rest of the country. In a few years, a handful of landlords have built buy-to-let empires and are only getting started. Some €5bn more of investment is on the way, property expert CBRE reckons. The irony for would-be home-buyers is that it's their own rents - high and rising - that are attracting the wall of international money. Welcome to cloud cuckoo land.

Irish Independent

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