Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I think it is close to €3 billion in REITs according to the latest valuations. The total value of Irish property within these funds is between €18 billion and €19 billion. The CSO has revealed that non-household buyers, a large proportion of which comprise REITs and IREFs, had purchased 42% of new homes in Dublin by the end of July 2017. In the middle of this housing crisis, with people queuing up for houses and being outbid for them, non-household buyers are buying 42% of available properties in Dublin. First-time buyers only make up 25% of the market and are competing with these multibillion euro funds.

It should be remembered that there are only 100 IREFs and three REITs. As such, 103 companies have €18 billion to €19 billion worth of fire-power. That is the level of assets they have in their structures and they are out there competing with Mary and John who are trying to get onto the property ladder but who are being outbid all the time. There is a reason for that. The tax code provides a very lucrative arrangement for these funds, which allows them to outbid others.

While most of the focus of these funds is in Dublin, we see nationally that non-household buyers purchased 13% of all homes in the State in 2016. When one isolates local authorities and approved housing bodies from the figures, one finds that, within this category, 10% can be attributed predominantly to REITs and IREFs. As such, 10% of all homes across the State were purchased by REITs or IREFs. The 2017 figure nationally will be ahead of that. It is a disgrace that these tax avoidance structures are pushing up prices through the demand of the funds for property. They have the fire-power to buy up huge tranches of housing, which results in many ordinary people being unable to even dream of owning their own homes. We have to change the tax structures within these funds. Whatever the argument was about the need for vultures in 2013, it is no longer that point in time.

We have a huge problem with regard to housing supply and the last thing we should do as a Parliament is unleash these tax effective or avoiding structures onto first-time buyers in the market. They do not have a clue what is happening. Many of them are oblivious to what we are doing in this committee but we have passed the legislation to set up the tax structures which are now competing with ordinary Dubliners and people in Donegal for first-time houses. That is why property prices are increasing by 12.8% nationally and by higher rates in certain categories in Dublin city in particular. It is not all attributable to that but going back to the statistics, 42% of houses bought in Dublin to the end of July 2017 were bought by non-household buyers. Non-household buyers include a number of cohorts, namely, REITs, IREFs, local authorities and approved housing bodies. When we isolate the national figure of 13% and take away local authorities and approved housing bodies, 10% involves REITs and IREFs.

This proposal is looking for a report on the impact IREFs and REITs are having on residential property prices in the State. This is required urgently. I have suggested six months to be consistent with the timeframe in terms of the reports, but it needs to be done as a matter of urgency. What is going on in the Dublin market is crazy. This is not just coming from the left. Economists and big firms are calling for penalties on cash buyers and non-household buyers. There is a time for intervention. When these non-household buyers are buying up nearly twice as much of the Dublin property market in domestic homes as first-time buyers, the time for action is long past.