Foreign investors have been made scapegoats for Ireland's housing crisis
Institutions are better suited to private rentals than small buy-to-let investors
Institutional investors have been attracted by high rents, not vice versa. Photograph: Chris Ratcliffe/Bloomberg
A convenient scapegoat has been found to blame for Ireland’s dysfunctional housing market; namely foreign institutional investors, accused of driving up rents and outbidding first-time buyers.
These accusations are false. First, rents had exceeded their Celtic Tiger era peaks long before institutional investment stepped up in 2018. Notably, average rents rose by 8.5 per cent in Dublin in the 12 months to March 2019, with small landlords clearly circumventing the 4 per cent regulatory threshold by fair means or foul. The largest institutional player in the Irish residential market Ires Reit increased average rents by 3.7 per cent last year.