May The Rent Rise To Meet You

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“We’ve never seen rental increases like this in any jurisdiction that we’re aware of”

David Ehrlich (above) chief executive of Ires Reit, Ireland’s largest biggest (tax exempt) landlord.

First Time Buyer writes:

The latest CSO figures put the annual increase in residential property prices at 7.3%.

Moreover, average rents nationwide haves risen by around 12% over the past year, which is the highest rate of annual inflation on record.

Are the two linked? Absolutely!

Dr John McCartney, director of research at Savills, commented that

“the Central Bank rules prevented some people from buying and caused a temporary slowdown in the market. But the frustrated buyers were simply pushed into renting, which has driven up rents. What we are now seeing is a resumption of price growth as investors are being attracted into the market by ever higher rents.”

These increases are not only having a disastrous effect on communities, they are severely damaging our Irish competitiveness at a time that when we need it most.

But rather than address the problem, the Government have chosen to FAN THE FLAMES. Their “Help to Buy” scheme made Davy economists revise UP their growth forecast for house price inflation to 7% and at the same time gained praise from Tom Parlon of the Construction Industry Federation.

Now Minister Simon Convey has signaled that rent controls will not be introduced because he doesn’t want to “put the dead hand of regulation on the construction sector”.

Unfortunately, Simon has missed a trick, because as we know investors love CERTAINITY as they can easily model out their expected return.

Whereas if rents are expected to jump more than 10% a year, they will build this into their bid price; further increasing land and property prices and contributing to the problem.

The government needs to ACT NOW and introduce rent regulation and security of tenure and stop pandering to global wealth funds and the construction sector at the cost to Irish society.

Ireland’s biggest landlord: ‘I feel bad for the Irish people’ (Irish Times)

A spiral out of control: global real estate funds, rental crisis & government policy (Dr Rory Aherne, Tasc)

Act Now For Secure Rents (uplift.ie)

21 thoughts on “May The Rent Rise To Meet You

    1. Kieran NYC

      Yep. All responsibility is on a bunch of FG TDs in a minority government. The other 4m voters in the country are never at fault…

  1. Boy M5

    Fine Gael introduced a Capital Gains Tax exemption for property investors who bought between 2012 and 2014 inclusive and hold their property for seven years before selling it.

    So anyone who bought a property (during the dip) gets to make a huge profit without paying tax on it. It was brought in after lobbying by US vulture funds and of course Fine Gael obliged.

    There needs to be an investigation into that legislation. Not only did FG sell us down the river to merchant banks and the IMF, they then robbed the nation of the tax windfall from the upsurge in property prices.

    But of course Fine Gael don’t care because they’re not suffering and their mates are the ones who benefited from it.

    So who else benefited? What politicians introduced this tax exemption and who did they meet during the run up to it being voted in?

  2. Boy M5

    Fianna Fail wrecked the country.

    Fine Gael, like vultures waiting for the corpse to die, picked over the bones and scavenged the remains.

  3. Mark Kelly

    I have a crazy idea to solve the housing shortage……BUILD HOUSES and it goes like this:

    The government is the best placed to build say 100,000 homes in the next five years. This would cost about €15bn. (On average the cost would be about €300K per house) So if they borrowed 3.5bn to get going then they can borrow this money for 30 years at less than 1%. They have access to land banks or they can put compulsory purchases orders on unused zoned development land at a cost +10% basis or if they are feeling unkind cpo agricultural land and re-zone it.

    Note: Building the houses strategically is also of course important so the needed infrastructure would also be built as well . Taxing unused zoned land and allowing for higher buildings in the city centre is also needed. (also reducing the cost of land)

    The building of the houses would create 1,000s of jobs and 70% of the houses built could be sold to first time buyers at a cost + 10% basis. 30% of the houses could be provided as social houses at a low rent of €500 per month. The cost of the build would not have to include the taxes paid by the workers or VAT as the net cost to the government would be zero. This would help ensure they remained affordable.

    As the homes or sold and rented to ourselves we can use this money to finance the build of the rest of the houses. The social houses would be revenue generating and by the end of the 30 years you would have enough money to pay the bond back. Low wage workers who paid this for 30 years could also be gifted these homes.

    That is how a proper government would solve the housing crisis.

    This would reduce both rents and house prices of course and may push some unfortunate people who bought at the height of the last boom back into negative equity so some help should be provided for them as well but we have to get out of this mind set that we will buy a house that will continuously appreciate in value or make loads of money by selling houses to each other.

    These blood sucking no tax paying vulture funds can go get fc*k***D

  4. Anne

    “We’ve never seen rental increases like this in any jurisdiction that were aware of”

    David Ehrlich (above) chief executive of Ires Reit, Ireland’s largest biggest (tax exempt) landlord.

    Disgusting.. Tracksuit wearing pimps have more morality.

  5. GenerationScrewed

    We own 99.9% of AIB (which was amalgamated with EBS) and PTSB and 15% of BOI which the government want to spin off at some stage.

    If they fan the flames of property speculation “look you can get 8% gross yields on property, buy buy buy like it’s 2005!” the values will go up and they can start to rectify the 15 billion worth of Mortgages that are in arrears and the 12 billion worth of Mortgages that are restructured (term extensions, interest only, split mortgages etc). Basically they’ll become less of a drain on banks balance sheets. The government aren’t going to build like crazy creating a load of supply for fear of property values NOT sky rocketing.

    The policy of government is to get property values back to close near boom levels and saddle the next generation with piles of debt in a few years whilst also allowing current landlords (of which Simon Coveney is one) to gouge this same generation with unsustainable and sky rocketing rents. The IRES guy even said in his interview that a 3% per annum increase in rent works for them (yet jacking rents up with double digit increases)

    The best small country in the world to be royally screwed over…

      1. GenerationScrewed

        Im not inferring there is anything wrong with it but the optics are bad.

        From the 2015 register of members interests:

        COVENEY, Simon (Cork South-Central)
        1. Occupations Etc. ………….. Landlord: (1) The Moorings, Harty’s Quay,
        Rochestown, Co. Cork; (2) Dublin Apartment (+ private
        home).
        Other Information Provided: (2) A private home in
        Dublin which is exempted from disclosure under Heading
        4 Land (including property)

          1. Anne

            Oh we’re back in business..must be the app. I was saying..

            Yeah, the optics are fairly dismal all rright…it’d be like expecting the turkeys to vote for Christmas.

            Shower of c****

  6. D'arcy

    Why can’t owner occupiers get preferential treatment? If a house is for sale and an investor/landlord and family are bidding – within a reasonable margin, the family’s offer must be accepted. This would stop excessive profiteering from what most would consider an inalienable right to shelter.

    1. Rob_G

      Why should they get preferential treatment? If you were selling your house, would you like it if you were obliged to accept the lower of two offers because it was from someone who claimed that they were going to live in it?

      1. D'arcy

        Well that’s what I meant by within reason – perhaps a few percentage points. And yeah, I would like to think that my house went to a family for a few grand less. Perhaps we need a little more social solidarity for us all to do better. Our government doesn’t give a shit about us and they are incompetent and ideologically opposed to fairness – so maybe we need to disintermediate them where possible.

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