Damien English (Meath West, Fine Gael) | Oireachtas source

I thank Deputy Troy for raising this issue in a formal capacity so we can have a debate around it and bring some rationality to the conversation. Like Deputy Troy, I spend a lot of time meeting people for many different reasons on a weekly basis. There is a misunderstanding of what is happening in some parts of the housing market. When one spends time with people and has the chance to tease things through with them about the importance of all the different types of house building programmes and the different types of investors such as the State for social housing, pension funds, individuals buying their second or third home, first-time buyers and second-home buyers, one can see that we need all the different types of financial arrangements and purchases coming into a system to generate a full and sustainable market for housing. I want to be very clear about this because Deputy Troy tried to allude to what Fine Gael is supposedly about. Fine Gael and Independent members of this Government, with the support of many others here, want to deliver a sustainable housing construction market. This means that we need a combination of all sorts of different sources of finance and a combination of private housing; affordable housing, which is subsidised housing; properties for rent; and properties for purchase. We need to supply the market for first-time buyers. All the different categories of market need to be supplied. The overall target must be the number of houses we need every year.

In the past, we have had boom and bust when it came to construction. We have had 10,000 houses one year, up to 20,000 in another year, up to 90,000 in another year and then back down to 10,000. That is not a sustainable housing construction sector. It is not a sector in which people can safely invest their time and skills in education to develop for work in the construction sector. It is not a sector in which someone can develop his or her skills running and developing a company because it is not a safe place in which to do so. A safe place to invest is a housing construction sector that delivers about 30,000 units every year for the next 25 years. We have produced the population projections under Project Ireland 2040 and we know we need to deliver and get to about 30,000 houses every year for 20 years. Naturally, it would be great if we could wave a magic wand and have 50,000 tomorrow to deal with the current crisis but we must build up to that level. This year, about 23,000 houses will be built. We must also put in place a system that brings us close to 30,000 and keeps it at that in a managed and co-ordinated way that is right for everybody. I met people last night who paid probably twice as much for their house 15 years ago - a price they should not have paid but were allowed to pay because they were allowed to borrow way beyond their capacity. It was never sustainable in the first place yet they were allowed to do it. We cannot repeat that. I want to be clear on that before I go into further detail.

The Government is committed to increasing the supply of all types of housing, including social, affordable and private housing. Institutional investment in the private rented sector is just one aspect of this increasing supply. The Deputy is right that it should not make up all of it and it certainly is nowhere near that. It will not be near that because institutional investors will invest to a certain level and that is where it will go. The economic division of the Department of Finance recently published a report, Institutional Investment in the Housing Market, to bring clarity to the potential impacts of higher levels of institutional investment on the residential property market. The report examined the role of institutional investors and large-scale landlords in the Irish residential property market. It found that the combined purchasing activity of property funds, real estate firms and real estate investment trusts is relatively small accounting for a net 1% of transacted units in 2017 and not far above that in 2018. We checked the figures as well. Ownership of rental properties by large-scale landlords - those who own more than 100 rental units - is also low, accounting for 4.6% of the wider market. Yes, there is some activity this year. This is housing supply that will probably come in during 2020 and 2021, not necessarily this year. In some cases, they are pre-orders.

There are approximately 340,000 tenancies registered with the Residential Tenancies Board, RTB, of which approximately 310,000 are private rented tenancies. The vast majority of landlords, just over 70%, own just one property with a further 16% owning just two properties. Almost 86% of the registered rental housing stock is possessed by landlords with less than ten properties so it is not the case that it is 100% of the market, which was the impression being given this week. In any given week, there will be certain news items that take over. It gives the impression that all the activity involves these multinational investors. That is not the case.

In the context of a residential rental sector which is largely composed of small-scale landlords, there are certain benefits associated with institutional landlords as part of that mix. Product mix is important and some tenants may prefer to lease from a larger landlord while some may not. What is important here is that we increase the overall supply as well as introduce changes in legislation to protect tenants and give them more rights and services. There is a focus on this issue because the price is quite high in some cases because we still have a dysfunctional housing market and a dysfunctional rental sector. As we increase supply across all the different sectors, it will help smooth that over and deal with that crisis and people will then accept that we need to have different types of investors, including the person buying his or her own house. We need to generate enough supply and to do that: we need all people coming to the table.

See this speech in context