Ireland considers rent controls

Graham_Devon

Ireland's government is considering whether to bring legislation to link residential rents to the rate of inflation to temporarily control soaring rental costs. That's according to the country's environment minister, Alan Kelly who told national broadcaster RTE: "It's certainly something I'm in favour of as an interim measure while supply is coming up in relation to housing, and reports linking it to CPI would be accurate." A severe shortage of housing in Ireland's towns and cities has become a big political issue ahead of next year's elections. Rents in Dublin are almost back to levels seen at the height of Ireland's property boom a decade ago. It was the overly hot housing market you'll remember that wrecked the country's banks and economy in 2008 and forced Ireland to ask for a bailout from the International Monetary Fund and European Union in 2010.

This story raises some questions...

Wasn't Ireland's large property crash due, in part, to the large oversupply of properties?

7 years later, they are considering rent controls due to a severe shortage of housing?

I know Ireland took the bulldozer approach to shore up property values and knocked down a few brand new empty homes - but I'm now wondering just how many they destroyed?!

http://uk.reuters.com/article/2015/09/27/uk-ireland-housing-idUKKCN0RR0F820150927

Infact, it appears they were bulldozing entire estates of new homes as recently as 2013...
http://www.dailymail.co.uk/news/article-2531852/Exorcising-Irelands-ghost-estates-Demolition-begins-housing-projects-built-economic-boom-left-country-300-000-homes.html

cells

I have been saying for a while Ireland has no excess and didnt have a building boom they were just catching up. almost everyone here was disagreeing I remember generali saying either everyone else is wrong or i'm ahead of the curve

like I said back then, how can ireland have had a building bubble and an excess of homes when

1: they have less homes per capita than France or Germany
2: Prices are high (~202,000 euro average) and going up

cells

Only 13,000 new homes were built in the 12 months to July, far below what is needed to tackle the Republic’s housing shortage, figures released on Tuesday show.

The State’s Geodirectory database showed that there were 2,008,568 homes in the Republic in July, and that 13,062 had been added over the previous 12 months.

Research by the organisation indicates that construction levels are still too low to match demand. Geodirectory says that data from the Property Price Register and Central Statistics’ Office support this.

The report, commissioned by Geodirectory from DKM Economic Consultants, shows that 45,138 homes were sold during the 12 months to last June, almost 90 per cent of them were second hand.

Dara Keogh, chief executive of Geodirectory, said that building is not keeping up with increased demand. “The increased demand and low levels of construction tend to put increased pressure on prices, as we’ve seen in the Dublin market,” he added.
Dublin had the highest sale price, €342,284 in the Republic, ahead of Wicklow at €277,394 and Kildare at €235,582.

The Irish are in a very similar boat to the UK at 2.29 persons per home vs the UK at 2.35. They just have a little bit more homes per capita

It will be interesting to see how the two countries build rates vary over the next 5 years. Will we see Irish new house building increase while England continues to lag?

melanzana

Ireland has a severe shortage of housing all over now. Mad as it seems.

The bubble was a buy to let speculation/developer nightmare.

Now the economy is moving up again and there just are not enough houses/flats for people to live in. The rents are horrendous in Dublin anyway. Lack of suppy in location, location, location!

Problem is, all the speculative house building is not where people now want to live and work, i.e. the cities. Homeless people are refusing to move to where the speculative housing, lying idle is situated. But they are not forced to take it either. A hotel or a hostel instead. Still many hold out!

I can't comment on rent controls, but I don't think it will be introduced.

HAMISH_MCTAVISH

I hope they go for it with rent controls.

It would be good to have a close and current demonstration of why they are such a terrible idea.

Old_Git

I think some landlords will try to get around this by introducing silly fees .

cells

They are on course to build about 50% more homes than the UK this year (on a per capita basis, plus they already have more than us) and thats still probably not enough

population growth is adding a lot of demand but demographic changes are adding even more demand!

Ireland probably needs 30,000 homes a year to stabilise its prices and rents and they need them in higher demand areas. The UK probably needs closer to 400,000 to stabilise rents and prices

I dont think the UK has a chance in hell of hitting 400k new builds a year but ireland maybe she can go towards 30k a year assuming over the last 8 years or so they haven't made building difficult and the banks are in a state to allow that increase to happen with finance

Graham_Devon

Can't really find a credible source that gives a figure, but many sources, be they blogs or irish papers seem to suggest that around 40 entire housing estates have been demolished since 2008.

Some were half built, some completely finished. Some poor people even found that the houses around them were being pulled down, as they had already bought.

So what was the deal with all of this? I remember the threads on here with some suggesting many more homes needed to be demolished in Ireland due to the sheer oversupply. And now we have this article talking of rent controls due to a chronic shortage of housing?

HappyMJ

Those housing estates were built in places people did not want to live. Miles from anything. No schools, no health care and almost no facilities of any kind. The developers built the houses hoping services would be built by government later but as the government ran out of money and no one moved in the houses were surplus to requirements.

Rent controls won't work.

cells

Graham_Devon wrote: »

Can't really find a credible source that gives a figure, but many sources, be they blogs or irish papers seem to suggest that around 40 entire housing estates have been demolished since 2008.

Some were half built, some completely finished. Some poor people even found that the houses around them were being pulled down, as they had already bought.

So what was the deal with all of this? I remember the threads on here with some suggesting many more homes needed to be demolished in Ireland due to the sheer oversupply. And now we have this article talking of rent controls due to a chronic shortage of housing?

confirmation bias, nations are big its easy to find an example of anything to make your point.

if you look at the overall picture as i kept saying for years now Ireland does not have an oversupply of homes they have fewer homes per capita than France or Germany and only a tad more than the UK. Of course they could have a very limit cases of local oversupply but even that will be rare but enough for confirmation bias

also as I have said now for years pretty much the WHOLE WORLD has a shortage of homes it needs at least 4 billion good quality homes yet not even half that exists.

melanzana

Full housing for everyone would mean a collapse in rents for BTLs.

Who is calling the shots I wonder. And I apply that to UK and Ireland for example.