Housing Minister insists cuckoo funds will not drive up apartment rents 

Darragh O'Brien said he had been advised against adding apartments as this could have "a catastrophic effect in relation to future developments of apartments"

Housing Minister Darragh O'Brien also strongly defended the decision not to include apartments in new measures introduced this week, which imposes 10% stamp duty on investors who buy up 10 homes or more in a single development. Photo: Sasko Lazarov / RollingNews.ie

Investment funds will be blocked from buying up apartment blocks and leaving them partially empty to drive up prices, under Government measures.

Housing Minister Darragh O'Brien said he is now working with Finance Minister Paschal Donohoe to clamp down on the hoarding of apartments.

It comes amid reports that hundreds of high-end new apartments are lying idle despite a chronic shortage of rental stock.

Mr O'Brien also strongly defended the decision not to include apartments in new measures introduced this week, which imposes 10% stamp duty on investors who buy up 10 homes or more in a single development.

Mr O'Brien said the measures are "significant" but they will be kept under review.

He said he had been advised against adding apartments as this could have "a catastrophic effect in relation to future developments of apartments".

Speaking at Trinity College in Dublin, Mr O'Brien strongly hit out at investors who are bulk purchasing apartments and then leaving them vacant to ensure rents stay above a certain price.

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In some cases, up to 50% of new apartment blocks remain empty in areas such as Dublin's docklands.

He said the Government is looking at potential tax measures to disincentivise the hoarding of properties.

"There's also the issue around rent transparency, which I've mentioned before as well, whereby rents are being advertised at a certain price but then there are deals being done underneath which actually show the published prices and inflated, rent. 

"It is a matter that we're looking at, we're looking at very seriously, there may be measures that we can take around the local property tax, potentially, and other things but that's being worked on."

The newly announced measures will give councils the power to ringfence up to half of new-build housing estates for owner-occupiers under new rules aimed at tackling the influence of so-called cuckoo funds.

Housing Minister Darragh O'Brien said he is now working with Finance Minister Paschal Donohoe to clamp down on the hoarding of apartments. Photo: Sasko Lazarov / RollingNews.ie

However, new rules agreed by the Government will not apply to the hundreds of millions of euro worth of homes already sold to institutional investors and do not include any apartments.

"I don't want a situation whereby it's apartments for rent houses for people to live," Mr O'Brien said.

"I want a level playing pitch for first-time buyers, I want to make sure that homes are available for people, and not for big investor institutions.

He added that "there is a role" for international property investors in Ireland, adding that the Government "have been clear on that".

But these institutions should only be active in "the right places" where it can add to supply, not to take away from it.

He said the changes approved by the Cabinet this week focus on areas of the housing market where measures are most needed at the moment.

"We have a constrained housing market, supply is down as everyone knows, and has been further exacerbated by Brexit."