Construction BUSINESS

Responding to the Daft.ie Rent Report for Quarter 1 2019, IPAV, the Institute of Professional Auctioneers & Valuers, said there are two questions that have not been addressed in the current housing crisis – one, does the State support those aspiring to own their own homes, and two, does it see a solution beyond institutional investors as the primary source for the badly needed supply of rental properties?

Pat Davitt, Chief Executive of IPAV, said: “If the answer to both those questions is ‘yes’ then there needs to be big policy changes to support that.”

“This latest Daft.ie report shows, for the umpteenth time, that in every county in Ireland it would be cheaper to service a mortgage than pay rent, if you can get one, even allowing for a 2pc increase in interest rates. And that applies even in Dublin where property prices are substantially higher than in most of the rest of the country.”

Pat Davitt, Chief Executive of IPAV.

Pat Davitt said a recent Department of Finance study says Government policy is one of “tenure neutrality” but individual Ministers have said they support a policy of home ownership.

“We do need institutional investors but if they continue to receive more than favourable tax treatment by comparison with individual landlords they will dominate the market in a short time and acquire monopoly status, and that would be dangerous for society,” he warned. “One can call them cuckoos or ‘swallows’ as coined in the Daft report, either way they will quickly find their nest if it’s made for them by the State, that is their nature.”

He pointed to the RTB (Residential Tenancies Board) Rent Index for Q 3 2018 which found there were 1,778 fewer landlords than three years previously and tenancies had declined by 8,829.

Pat Davitt said the model of house building in Ireland, the traditional one, has been in “meltdown” since the financial crisis. Lending and planning difficulties, excessive interest rates and a halt to social housing construction, with few exceptions in the latter case, have transformed housing.

“The structural issues around planning, the cost of building and the excessive cost of building finance for SME builders in particular remain as major impediments to the supply of homes,” he said. “The Home Building Finance Ireland €750 million fund first announced in October 2017 was intended to target the SME building sector but it is still very unclear where it’s at.”

IPAV has long cautioned that for it to succeed the loan terms and administrative detail should not be over burdensome.