Irish developers have dangerous fondness for one good thing
Cantillon: Construction of blocks for rental purposes must not run away with itself
Ireland has a problem with housing but the way to solve it is by building a variety of housing. Photograph: iStock
Sometimes Irish developers can’t get enough of a good thing. The mistakes of the seismic event that shook Irish property just over 10 years ago are long forgotten.
Today, they’re developing blocks to sell wholesale to one investor or pension fund. No longer are developers building apartments for first-time buyers, but going straight for the rental market jugular and developing for pension funds.
This is all well and good, but it won’t be long before a developer thinks build-to-rent can be the next big thing for areas outside Dublin.
Built-to-rent, whereby a development is designed and sold to one investor with rental purposes in mind, is a specific type of asset that deserves a place in the Irish market. It serves an important function for transient workers and those along key infrastructure lines in areas that need workers.
But by no means should it become a feature of lightly populated rural areas. Developers, therefore, should be cautious before they start building properties with this sort of sales process in mind in an area that simply doesn’t require it.
What we do need are apartments for first-time buyers, three- and four-bedroom houses for families and smaller comfortable houses and apartments for downsizers. All of these need to be built in relative proximity to each other so that a long-time resident of Grand Canal Dock isn’t forced to move miles away just to get the smaller property that now serves their needs.
It’s time to ensure that we get the variety of property that we need, not the single product developers want to build and sell at any given time. That requires the Government to develop policies to try to ensure that diversity is in the pipeline.
Otherwise, we can (yet again) expect to get far too much of what is perceived to be a good thing. And that can only end badly.