Letters to the Minister #1: Dublin Housing Market 19-JAN-2014

Subject: Dublin Housing Market
From: Macdara Butler <macdara.butler@gmail.com>
To: minister@finance.gov.ie

Dear Mr. Noonan,

I would like to firstly extend my support for your management of the Irish economy of the last 2 years which has been reassured and balanced.

The reason I am making contact with you is to highlight some of the emerging major structural issues with the housing market in Dublin.

I am an Economics graduate of UL myself so I believe I am well informed and balanced on this subject. The Dublin rental market is not fit for purpose and the rental stock in the central areas of the city is of a very low quality. The property market seems to be rapidly overheating with the emergence of “cash buyers” who are blocking young families from acquiring their own homes

Rental Market

The rental market is under served in Dublin and with the influx of high-skilled workers for the IT and Finance knowledge economy jobs there is a major structural problem. If people can’t get affordable, high-quality rental accommodation nearby there place of work, then economic growth is going to be severely impacted. Those people will simply move to other less desirable cities where their standard of living can be sustained.

I believe that the rental market needs a comprehensive regulatory system put in place with a rating system and with powers linked to the Health and Safety Authority.

Recently you might have seen the house burned out on Thomas Street where a large number of people were living which was in a very poor state of repair. The health and safety standards of these old buildings are so far below the standards it is incredible, particularly when one reflects on the Priory Hall situation.

By introducing regulation you will be able to stimulate jobs and regeneration within the city in the construction sector, the private owners will self-fund the upgrades.

Property Market

As you are aware the property market in Dublin is beginning to overheat at the moment with asking prices for private residences soaring 20% to 30% in January alone, and right across the city.

Obviously the market needed to recover to a normal level but the legacy of the credit crunch and the property bubble of 2007 has left some structural issues in the monetary system.

We are seeing a massive transfer of wealth whereby private investors are buying up all of the available properties, outbidding young families
looking to purchase a home and take up a mortgage.

Your department needs to intervene immediately with some policy instruments to cool down this phenomenon and send some signals to the internal market
also.

There are huge social and economic consequences if Dublin becomes the new London, a 2-tier society controlled by a super-rich elite who own all of the property in the desired locations. That outcome is not what the people of Ireland want and your government must do everything possible to keep Ireland a society where social mobility is very high.

I don’t know the solution to this complex issue but I would imagine some heavy taxing of investor purchases would have the desired deflationary
effect.

As a 32 year old Irish citizen it will be my generation that has to live with the consequences of decisions and actions that are taken or not by the
current government, I have no doubt you will be elected for a 2nd term also of course.

Yours sincerely
Macdara Butler


Mr. Macdara Butler
6 Collegewood
Castleknock
Dublin 15


REPLY

 

From: “Minister,” <Minister@finance.gov.ie>
To: “macdara.butler@gmail.com” <macdara.butler@gmail.com>
Subject: RE: Dublin Housing Market
Date: Tue, 6 May 2014 13:10:35

I acknowledge receipt of your email. Your correspondence will be brought to the attention of Mr. Michael Noonan TD, Minister for Finance and to the relevant officials in the Department of Finance. If the content of your correspondence relates to the functions of the Minister for Public Expenditure and Reform, Mr Brendan Howlin TD, it will be forwarded to his Office for attention.

Yours sincerely

Alex Lalor
Private Secretary to the Minister for Finance

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