Ireland’s runaway rental property bubble is “unsustainable” and is making it increasingly difficult for people on salaries as high as €50,000 to find homes, the head of a State financial agency has said.
National Treasury Management Agency (NTMA) chief executive Conor O’Kelly admitted the situation and said there is a clear “market failure”, under questioning from politicians over his group’s alleged role in fuelling the rental crisis.
At yesterday’s final Dáil Public Accounts Committee (PAC) meeting until September, Mr O’Kelly was asked by unaligned Independent TD Catherine Connolly to explain what attempts the NTMA was making to address the surging rental sector.
Asked if he believes the current cost of houses and apartments available for rent is “unsustainable” and is making it almost impossible for people on the industrial wage and for others earning up to €50,000 a year to find homes, he said: “Yes, I would agree with that.”
He later noted the situation has been caused by “market failure” and that the NTMA and other State bodies are trying to address what has happened.
Mr O’Kelly said the NTMA is acutely aware of the pressing problems in the rental sector and is making attempts to address the situation by investing in property firms in order to increase housing and apartment supply to the market.
However, he was criticised by Ms Connolly, Sinn Féin’s David Cullinane, and Fine Gael’s Kate O’Connell, with the latter suggesting such a system means the NTMA has a vested interest in keeping prices high.
Pressed by Ms O’Connell why the NTMA would be seeking to change a system that will allow it “to make money”, Mr O’Kelly interjected: “We’re not here to make a profit”. He said the NTMA limits its approach to only ensuring it has a return on it and the taxpayers’ investment.
Latest figures from property website www.daft.ie show that average rental prices have hit a record high of €1,875 a month in Dublin, while in Cork the rate stands at €1,210 a month and in the rest of the country €883 a month. The rates are up 11%, 9.3%, and 10.1% respectively since March 2017.
Meanwhile, the PAC was also told yesterday the NTMA is taking ongoing actions to reduce Ireland’s national debt and has managed to shave billions of euro off the deficit in recent years.
Pointing to a high-level dual bond sale auction that was taking place at the same time as yesterday’s PAC meeting, Mr O’Kelly said the NTMA has raised another €1.25bn through the process.
The NTMA chief executive said the State agency’s total issuance of benchmark bonds since the start of the year has risen to €12.5bn and that a previously set bond sale target of up to €18bn this year is likely to be met.
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