The housing crisis cannot be solved without private capital, and if investors feel unwelcome they will simply take their money elsewhere. Photograph: Dave Bolton/Getty Imagesbrought a range of measures likely to further damage Ireland’s already fragile relationship with institutional investors, at a time when we need them most.
The introduction of a 6 per cent stamp duty on properties valued at more than €1.5 million initially caused confusion, especially regarding its impact on sectors such as the private rented sector and student accommodation. Although the Government clarified that these sectors are exempt, such uncertainty is unsettling for investors, particularly in a market where rising construction costs and regulatory challenges are already eroding margins.
In May, Minister for Housing Darragh O’Brien emphasised the importance of foreign investment in addressing Ireland’s housing crisis, acknowledging that international capital is needed to fund large-scale developments and increase the supply of new homes. Yet, with each new tax and regulation, the message being sent to investors is one of caution, if not outright deterrence.
The Government has set ambitious housing targets and has openly stated that private capital is needed to achieve them. However, each new measure seems to make it more difficult for that capital to flow into the housing sector. The higher stamp duty rates and regulatory restrictions may serve to protect homebuyers in the short term, but in the long term they risk reducing the flow of investment that is necessary to build the homes we so desperately need.