The Taoiseach has told a meeting of the Fianna Fáil parliamentary party that the Government will immediately deal with the "unacceptable" situation where first-time buyers are being force to compete with institutional investors for homes.
Micheál Martin told the meeting that he has now engaged will all the key ministers on the issue.
It comes after the Taoiseach told the Dáil that institutional investors purchasing large portions of housing estates runs counter to the Government's aim to "give priority to first-time buyers".
The Taoiseach told the Dáil that he discussed the issue with the Ministers for Finance, Public Expenditure and Housing after investors made large purchases in estates in counties Dublin and Kildare over the weekend.
He was replying to Social Democrats co-leader Catherine Murphy, who said there was an urgency about the matter as the country was "reaching the point of no return".
She said the international investors were being "advantaged" by the Government because they were not subject to stamp duty or corporation tax.
Ms Murphy said that a "skewered ideology was in place" and that the Taoiseach needed to give a date when things were going to change and it "can't be put off until the budget".
"We're getting to a point of no return"— RTÉ News (@rtenews) May 5, 2021
Social Democrats co-leader Catherine Murphy says there is a "skewered ideology" in place, and that the Government must urgently address institutional investors purchasing large portions of housing estates | More: https://t.co/IGrLJOSjv9 pic.twitter.com/nvwzAvd19v
She said it was "madness" that investors were able to conclude long-lease arrangements which would enable them to rent the properties for 25-years before handing the back to the developer.
Mr Martin said: "We are going to deal with that. It is not acceptable."
He added that the Government would work with the Social Democrats on legislation it was bringing to the Dáil tomorrow.
Meanwhile, the Finance and Housing Ministers have today discussed the issue of institutional investors purchasing newly completed housing estates here.
Minister for Finance Paschal Donohoe and his officials are now set to examine the issue further.
A spokesperson for the Minister said that significant changes in the taxation of Irish Real Estate Funds (IREFs) and Real Estate Investment Trusts (REITs) have already occurred and it is critical that measures continue to be followed to increase the supply of housing.
The Government has indicted that while the level of institutional investment in rental accommodation has increased considerably in recent years, it is a relatively new sector in Ireland.
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Figures for last year suggest that the total number of residential units under institutional ownership in Ireland is estimated to be around 15,550.
This equates to 0.75% of the total housing stock and 0.4% of tenancies.
Purchases by first-time buyers have increased recently with over 4,700 mortgages drawdowns by this group in the first three months of the year, the Department of Finance has said.
This is the highest level since the early months of 2007.
The Taoiseach said that 1% of existing housing stock in the State is owned by private investors and that the issue needed to be seen in proportion.
"We're going to deal with that. That is not acceptable"— RTÉ News (@rtenews) May 5, 2021
Taoiseach Micheál Martin has said that institutional investors purchasing large portions of housing estates is unacceptable, and that Finance Minister Paschal Donohoe is examining the issue today | https://t.co/IGrLJOSjv9 pic.twitter.com/JcMIT3DSjF
Sinn Féin leader Mary Lou McDonald said wealthy investment funds are depriving people of the chance to buy a home.
Ms McDonald accused Fianna Fáil and Fine Gael of rolling out the red carpet for investment fund companies with sweetheart tax arrangements.
She told the Dáil during Leaders' Questions that people scrimp and save to buy a home but investment funds swoop in to push that away from them.
The funds charge some of the highest rents and they can gazump any buyer on any estate because the Government allows them too, Ms McDonald said.
"No person trying to buy a home could possibly compete with them"— RTÉ News (@rtenews) May 5, 2021
Sinn Féin leader Mary Lou McDonald says wealthy investment funds are depriving people of the chance to buy a home | More: https://t.co/IGrLJOSjv9 pic.twitter.com/0GSJTk5US8
She also said that the Government is in "cloud cuckoo land" if it thinks that €450,000 is an affordable price for a home in Dublin.
Mr Martin said institutional investment in residential property was supposed to increase housing supply and not to be in competition with first-time buyers.
Meanwhile, Labour's Duncan Smith said young couples are "absolutely devastated" to see cuckoo funds buying up both new and second hand homes.
Speaking during Taoiseach's Questions, he said that in "insidious" practices investment funds are offering over the asking price so the properties do not even come to the open market. Mr Smith said this "has to stop".
"First-time buyers are missing out. They don't even know they’re missing out"— RTÉ News (@rtenews) May 5, 2021
Labour’s Duncan Smith says investment funds are engaging in "insidious" practices in offering over the asking price for properties so they don’t come to the open market | More: https://t.co/IGrLJOSjv9 pic.twitter.com/kfrXbljouu
The Labour Party has issued an ultimatum to Minister for Housing Daragh O'Brien demanding that he re-introduce a Bill which would ensure up to 30% of new housing developments is sold to first-time buyers.
The bill was part of an effort to prevent large investment companies buying up entire estates before the homes go on the market.
Mr O'Brien brought forward this piece of legislation when he was an opposition spokesperson on housing in 2019.
However, it was not progressed although the Minister said yesterday he is still keen to have it enacted.
But he said the proposal requires greater analysis before proceeding.
Labour Senator Rebecca Moynihan said her party would introduce the Minister's bill "word for word" if he does not do so himself before the end of the week.
Additional reporting Paul Cunningham