What do ye make of this ? What is the ‘pro-vulture’ fund argument ? Non interference in the market ?
by Eire_ninja_warrior
What do ye make of this ? What is the ‘pro-vulture’ fund argument ? Non interference in the market ?
by Eire_ninja_warrior
31 comments
The argument is that they make homes available for rent.
Highest number of FTB drawdowns since the Celtic tiger but still no homes available to rent.
These groups provide rental properties (albeit at a cost)
The (lying) argument FF/FG would make is that penalizing vulture funds will stop large scale builds being done because vulture funds are the only ones who’d buy them at a cost that makes sufficient prices for the builder
You go back a couple years and two big problems (by no means the only ones) in the housing sector were “accidental landlords” and banks not lending for development. So letting funds come in to buy those up makes a lot of sense. They can come in with plenty of capital, finance new development and take those pesky second homes off poor beleaguered landlords.
Of course now things look a little different.
– More potential buyers for properties means higher prices. Higher prices encourages construction (particularly against other construction opportunities). Funds can also finance construction.
– the shortage of rentals is FAR more severe than in the sales market, you may genuinely struggle to get ANY rental, but there’s generally an ok supply of houses fir sale around the country if you have the money. Even with government supports, the new builds are generally more expensive than comparable second-hand homes, from what I’ve seen.
– I personally think having funds as landlords is overall better than “small” landlords provided there is sufficient regulations and protections for tenants. That’s unfortunately still lacking.
In all, there’s arguments for and against, just some of the “for” here.
Was this the proposal to increase stamp duty by 7%? That wouldn’t even slow them down lol.
Some developments are built using a payment advance from the fund to the developer.
***Some*** developers would not be able to build without this credit/funding.
Banning funds from buying bulk lots of houses would result in a non-zero reduction in total home completions.
Pro-Vulture argument: They’re ugly birds and shouldn’t be discriminated against because of that. They were also pretty funny in the Jungle Book movie.
None of these funds are “vulture funds”. It’s an inaccurate label used by SF because they know that it gets a reaction out of people that don’t know better.
>What do ye make of this ?
The language makes me cringe a bit, all a bit tabloid.
* How are these funds “vulture” funds – they don’t meet the definition of vulture funds but, hey, it sounds cool.
* Also the family bit, again emotive language, do people who aren’t in a family unit not buy houses?
* And it’s not even what the vote was about, is it? Was the vote not just about changing the *govenment’s* stamp duty rate?
That said the government should be doing more to prevent housing stock being bulk bought by funds. Funds play a big role in developing accommodation but the funds that are bulk buying stuff that is already built don’t seem to be adding much.
Ryanair snapped up 15 new builds in Swords to rent out to staff
They don’t have a leg to stand on really, they just want to keep their buddies happy, do you think politicians care about people? 😅
It’s because it’s actually an incredibly small thing, and the reason of course the opposition is blowing it up into a major issue is they want attention taken away from the good 2023 data on housing.
If people want to be mad about being outbid for houses or having houses pulled out of the market before they’ve had a chance to bid, they should look at the fact that the Government is actually a major purchaser of housing at the moment. Darragh O’Brien himself bragged on Virgin Media on Monday I think it was that the state was currently the biggest player in the housing market, if anybody thinks their enemy here is private capital, they’re very wrong.
When I lived in the US I rented from an apartment block that was run by one company. There was no individual ownership and no individual landlords, therefore. That place ran very well. The water (from a boiler in the basement) was always hot. Laundry was in the basement too – which stops leaks from any apartment. The pool was kept well, and there were common rooms where we could watch movies and people did that. The landlord/agency didn’t raise my rent because I was a good tenant (I suppose) even though rents increased by 20% over 5 years and my contract was yearly. an individual landlord probably wouldn’t do that. And any requests to mend things were answered on the day. There was a guy for that. Of course this probably wouldn’t happen in Ireland anyway even if we did get used to corporations owning rental properties.
Edit: lots of downvoting of facts here. Interestingly I think the downvoting will continue as this probably annoys renters (for no reason), but really annoys small time landlords.
I’ll add to this that this was a private members bill which are usually just put up to make a political point often without legal or wider policy input on their drafting.
Whoever made that daily mail like caption either doesn’t know what a Vulture Fund is, or does but believes that their target audience doesn’t and can be sold by a soundbite.
Some good answers here already. I left some comments about this in another thread which I’ll paste here.
Bulk buyers in housing fulfil essentially the same role as bulk-buyers in any other market. They handle marketing, accounting, tax “efficiencies”, risk management, and individual selling with an economy of scale. Economic theory suggests that this makes things cheaper for the consumer, and that’s what we see in sectors like agriculture where big supermarket buyers drive prices very low and are not liked by the farmers (who are the “greedy developers” in this analogy).
There’s not exactly much to love about big housing investment funds, but many other countries with terrible housing crises have over the last few years started to realise that the supply problem dwarfs all other issues. Vacant houses, evil landlords, airbnbs, and “vulture funds” are at best distractions, and at worst some of the regulatory tinkering the ultimately discourages supply just because of the degree of complexity added to new building projects.
Other countries are starting to understand this because they there is a rich and diverse public debate that pays attention to *serious* research with high-quality methodology, and listen to expertise in the sector. The same way that we would try to find the best kind of evidence from the best methodology available in medicine or climate, and work with pharma and medical device companies who produce solutions in the private sector.
We just don’t do that for economic and social issues in Ireland. It’s just “developers, banks and landlords are evil capitalists”. The irony is that the well-off and well connected are perfectly capable of assessing evidence properly it as we see in other areas when interests are all aligned (e.g. the evidence-following during covid). But more supply is not in the interests of property owners so they are perfectly happy with real problem not being identified.
https://www.canada.ca/en/office-infrastructure/news/2023/11/government-of-canada-launches-round-five-of-the-housing-supply-challenge-and-announces-funding-for-action-research.html
https://www.abc.net.au/news/2023-09-25/nz-auckland-house-supply-experiment-results-in-dramatic-change/102846126 (the choice of headline in this one is the perfect example of how the media run the narrative)
https://view.publitas.com/primeresi/the-affordability-impacts-of-new-housing-supply-gla-housing-research-note/page/1 (especially paragraph 4.34)
https://worksinprogress.co/issue/the-housing-theory-of-everything/
https://en.wikipedia.org/wiki/YIMBY_movement
https://www.bbc.com/news/uk-politics-67075706
(for contrast: https://www.maynoothuniversity.ie/people/rory-hearne , https://scholar.google.com/scholar?start=10&q=lorcan+sirr )
A vulture fund is a very specific thing. Not all firms who buy houses are vulture funds.
Like your rent being high, it’s gonna stay that way sure they probably will even raise it more.
There obviously isn’t really a pro argument, and that’s why they’ve used that emotive phrase in the headline. The reality of the vote was more nuanced than that.
The strategy of naming something inaccurately is a very common political propaganda strategy exemplified by North Korea being officially called “The Democratic People’s Republic of Korea” despite being an authoritarian dictatorship.
This is the only picture you need to see before voting in the next election.
I think what people are mad about is the following:
Investment funds purchasing 100+ homes from a new build.
People getting outbid by an Investment fund.
Unless the Investment fund paid for homes to be built and they never go up for sale…thats fine….if they are up for sale and someone from China/ USA just walks in and buys them all then that should be stopped.
I know when purchasing a home you can end up in a bidding war…might be 1 or 2k increments etc, but most people can’t get into a bidding war with an investment fund who can offer 30k more etc. You just cannot compete with that.
I also think tenants need better protections like in some places in Europe.
I pay rent I should be able to stay as long as I want until the house is being sold or I stop paying rent.
Even if I agreed with the premise, it’d be so hard to enforce and even to draft the law. How do you define a vulture fund?
The government are too lazy or just don’t care enough to have a semi state construction company to provide social and affordable housing to the people of Ireland. They’re failing to meet the demand so the “vulture funds” or real estate investment trusts come in to profit off our supply and demand issue, and build houses and apartments that they can make huge profits on by charging high rents. The government are okay with it because they don’t care if rent prices stay high because they’re not arsed to build sufficient houses themselves.
Love everyone in the comments defending this inaction from the govt. Because of course, let’s keep doing what we’ve spent the last decade doing, it’s bound to start working eventually.
There is zero EVIDENCE of letting whatever funds you want to buy up houses actually leading to more houses being built, and there’s plenty of evidence against. But sure, the landlord economists say the current action is a good thing, so it must be!
Can you name a vulture fund still buying assets in Ireland ?? Or in the last 8 years ??
its politicking. opposition by default vote against the government. Half of them would vote against a cure for cancer if they are in opposition. And vote for the same bill if in government
In case ye haven’t copped we live in a corporatocracy now.
The reality here is that allowing investment funds/companies or whatever to buy houses is raising house prices everywhere and pricing entire swathes of a population out of buying a home. I think it’s a sick practice as everyone should be able to see themselves buying a home. It’s a disgusting practice and should be specifically outlawed.
Contractors are x10 more likely to take the piss with Government contracts. Sometimes it feels like 100% of county council gigs run over budget and are delayed.
These are not “vulture funds”. They are “cuckoo funds”. The fact that people can’t even understand the massive difference between the 2, yet still feel like they know best amazes me.
To think FFG would ever let a SF bill pass. They voted no purely cause it was a SF bill.