Technological University Dublin senior lecturer Dr Lorcan Sirr speaks to Wikinews on housing market in Ireland

July 21, 2021

Wikinews correspondent J.J. Liu spoke with (TUD) senior lecturer at the School of Surveying & Construction Management, Dr Lorcan Sirr on Friday regarding the supply of housing in the Republic of Ireland and relevant parallels across the rest of Europe, as well as recent developments by the government and private sector that are causing a rise in rents and home prices in the Irish  market.

Dr Sirr is a regular contributor to  and has provided commentary to Irish radio station, national broadcaster (RTÉ) and various other publications. In addition to being a chartered planning and development surveyor and assessor to the Society of Chartered Surveyors, Dr Sirr is a and former external examiner for the, according to his profile on.

Dr Sirr was a lecturer and former head of research for the Faculty of the Built Environment at the, which entered a merger with two partner institutes to become TUD January 1, 2019. He received his in estate management at the, United Kingdom, and  in urban design and  in town planning at the. He has a second master's in literature from KU Leuven, Belgium, and speaks.

Interview with Lorcan Sirr


'''By most measures, Ireland is a far wealthier country than it was decades ago, yet the cost of rent and owning one's own home has been steadily on the rise. A Q1 Daft.ie price report found the average monthly rent in Ireland is up to EUR1443. Broadly speaking, to what do you attribute this to?'''

One of the main reasons for rents rising significantly over the last decade has been the increased use of the rental sector for. So, social housing is typically housing that's provided by the state for people that can't afford their own housing. And traditionally what has happened is that the state builds houses for people who need housing. And increasingly, they've not been doing that, but instead they've been placing families who need housing into the rental sector.

So, what they're doing there is, they're putting a lot more demand into the rental sector, constraining supply, and then rents are going up. So, if we got rid of the government's practice of using the private rental sector for state housing or for social housing, you would find that there's a lot more supply available, and that is a huge driver of rents.

The other driver of rents, of course, has been that, about four years ago, the government introduced a new system whereby rents could be increased annually up to a maximum of 4%, but of course when you introduce a maximum, the maximum quickly becomes the target. So, every landlord just increase[s] their rent by 4% every year. So over a number of years 4% on 4% on 4% on 4% adds up to significant rental increases.

'''Now, you're saying, 'the 4% the 4% the 4%', I know the [government] opposition, and, even before the &#91;COVID-19] pandemic, they've been advocating for a temporary, I believe, ban on rent increases, or just a rent-freeze overall. Do you think that would help the situation?'''

It depends on what you mean by 'the situation'. It would help tenants, without a doubt, it would help tenants , because suddenly they'd have a rent-freeze and their rents would be stuck where they are.

Whether it would benefit the sector overall is a different thing—whether it's constitutional is a third thing—but, so, it would benefit tenants. Would it benefit the system overall? If landlords aren't able to make a return on their rents, there is an increased chance that the landlords will leave the sector. Now, the house is still there, but the house will go for home ownership or for something else. So, you know, at a more [economic]-level, maybe that wouldn't be the best thing to happen.

And the third issue is that constitutionally there has been a court case in 1982, Blake [v.] the, which said that rent-freezes, per se, are unconstitutional. So, you're beginning to trickle in legal ground by doing something like that. Having said that, what they've brought in—it happened today, actually; [it] comes into effect today—is rents are now linked to the ; basically. And that happens, today.

'''Daft.ie relates the COVID-19 pandemic to the situational cession of construction activity and the second-hand market. Do you expect these variables to change in the coming weeks and months?'''

Funnily enough, last year, you know, we had built 21 thousand houses in 2019, and we kind of thought that last year, because of COVID[-19], we might get 12 or 13 thousand houses: these are really small numbers, like. But we got 20 thousand houses, I think 20 thousand houses in the last year, which was really surprising, it was nearly the same as the year before. So, COVID[-19] didn't really stop that much housebuilding activity. It didn't really have the change, the impact that we thought it was going to have.

Yeah, the construction industry are quite [fortunate] that construction sites [are] open-air, should be allowed to be open and remain open, and they kind of won their case a lot of the time. But, the other thing is like, do we expect these variables to change in the next months? I don't think we'll ever see. You have a lot of people out there who say we need 33 thousand houses a year, 48 thousand houses a year, whatever, all that numbers.

The market isn't going to supply more houses than it can sell, and over the last four or five years it has been selling the same number of houses every year: about seven or eight thousand houses. Out of the 20 thousand houses, only about seven or eight thousand come on the market for sale for ordinary people. And that's about right, that's about the level where prices are stabilising, at seven or eight [thousand]. If they build any more houses, sales prices will fall because they've increased the supply. And so, I think builders are quite clever and that, no matter what happens with COVID[-19], right, I still think we're only going to churn out 20, 22, 24 thousand houses every year. Because if they churn out any more than that, they're going to oversupply the market &mdash; and negatively impact the sales price. So they're very clever about maintaining, drip-feeding the market like that.

'''Speaking of the prices, residential property prices rose by 4.5% the year to April, in a range from 0.5% in apartments in Dublin to 8.5% in houses on the border with the North [of Ireland; Northern Ireland], according to the. Do you expect this to change as post-pandemic consumer price inflation—European harmonised inflation—eases more broadly?'''

Well, you've got to remember the places like, and  that you're referring to now with the 8.5%, they are starting from a really low base. So 8.5% is coming from something very low, so it's 8.5% of something low anyway, so [in] those areas, 8.5% doesn't scare me at all. It's more in the large cities, or, we don't really have large cities, but in the cities, our price rise is moderating.

And the interesting thing that's driving the sales prices outside Dublin is COVID[-19], and the idea that a lot of people have decided that, "instead of living in a city, and now that we can, I'm going to move back to [the] Border, Midlands, wherever I'm from originally where I can buy or get free land and buy a big house that I could never buy or build in Dublin, blah blah blah, and do that". And that's driving prices, with the people moving to other areas.

How long that will last is the other question. I don't know: I think a lot of employers will want a return at some stage, but I think we haven't fully thought out this idea [of] working from home, I think we're only [in the] very early stages of it. So I'm not sure of those price rises will sustain themselves over the next few years. I think there could be a moment of excitement at the moment, where people are going: "oh great, I can get out of the city, I can buy a cheaper house back in the countryside, and I'll do that", but, you know, pretty soon I think people will realise they want to be back in the city, or the excitement will wear off of that, and only a certain number of people do that, and the rest of the people stay in the cities.

What are your thoughts on the government's Rebuild[ing] Ireland initiative?

Rebuilding Ireland was the government policy from 2016 until this year, actually, last month. So it's finished now, it failed. It had five main pillars, like reusing stock, ending homelessness, all that stuff. It failed on all the pillars. It didn't hit any of its targets, and one of the problems with it was that it was very simplistic in many ways, and very much driven by quantity over quality. So, it was all about numerical targets, and it didn't matter if the houses that were built under these numerical targets were connected with public transport, they had local infrastructure, they had services et cetera, et cetera. That didn't matter, that was secondary; the most important part was to get numbers of houses up, you know, get those numbers, hit those targets.

So, very simplistic. We're [a] first-world country, we're quite a wealthy country. We should be doing better planning than, you know, the target is 25 thousand houses a year, let's hit 25 thousand, and it doesn't matter if they're not serviced by public transport, it doesn't matter if they're not sustainable development, it doesn't matter if they're in areas where they're not needed. You know, it was very much targets-driven, which is why it failed.

So, it failed on all their targets. So, you know, you need it better. We have a national planning policy that's telling us to do one thing in a kind of more correct, best-practice way, and then you have a Rebuilding Ireland housing strategy that's telling us to throw up houses everywhere as quickly as we can, and the two things do not compute, they're not compatible, you know. So we ended up with this mess, you know, as always.

'''So you're saying that the numerical strategy is not the best approach. I don't know if you've had the chance to read this, but [on] 14 July the government published its Summer Economic Statement and it's included a promise for a Housing for All strategy that's "designed to boost housing outputs". So, what do you think is most crucial in pursuing that aim, if not strictly numerical?'''

There's no point in building houses if it means that people are living far away from employment, for example, because you're building houses, but yet you're creating other pressures on traffic and congestion and forced car ownership and a whole lot of other issues. So, you know, it's not about the numbers, and in any event, one of the problems with these strategies is that it's one thing to have a numerical target if I have control over the numbers that are going to be delivered, because I am the state.

The problem with the Irish state is that it relies nearly entirely on the private market to deliver its housing output targets. You can't control the free market, you know, the market will do what it wants to do, so even though we might need 30, 40, 50 thousand houses a year, if the market decides that 20 thousand houses is the optimal level, that's all they're gonna build. And the state can't force them to build 40 thousand, so one of the problems with Rebuilding Ireland and having a targets-driven system is that targets are fine if you are in control of the delivery of the targets, but targets are pointless if you're relying on someone else to deliver those targets for you. And that was where we went wrong with that.

So I think, with the new Housing for All strategy, I haven't seen it, and I know there's arguments in the government about how much money should be allocated towards it, but I mean really, if it's going to achieve what it wants to achieve, the state needs to take far more control over the delivery of housing. Because if you don't have control over it, you lose control over quality, you lose control over costs, you lose control over timing, and by relying on the market, these are all lessons that we know from 20 years ago, but we're a bit dumb in that we don't, kind of, learn the lessons that we should be learning.

So we're back again relying on the market, and then, you know, you just lose control over everything.

'''What would you recommend the government do then, for its Housing for All strategy? It hasn't been published yet, but what would you personally think would be best, just in trying to solve [through] the strategy?'''

Yeah, I think we already have a lot of lands and we already have a lot of vacant housing in Ireland. We have an incredibly high rate of vacant housing, and the government seems to be reluctant to tackle either land that we have &mdash; a lot of land owned by the state itself, not even private land &mdash; and the reuse of existing housing. Like, we don't even tax people who leave properties empty, for example. I could leave my house in Dublin for ten years and nobody would tax me, nobody would say anything to me. And that's crazy, you know, when you have a housing shortage, like how could you let people leave their houses empty in a housing shortage? But we do! We can, in Ireland. There's no way to, kind of, penalise people for doing that.

And we don't charge really, we don't charge a meaningful property tax. So we're very reluctant to interfere with people's ownership of property and people's usage of property. So, we have land, and we have a lot of empty housing. I think really what has been happening over the last ten years is an increased centralisation over the control of the delivery of housing, so in other words, taking away power from local government—we have very weak local government anyway, like councils and town councils—and bringing it back to a centralised government department.

Really, what needs to happen is responsibility for the delivery of housing needs to go back to a local level, and put responsibility on councillors and mayors and people like that to deliver housing, not having it done from a central office up in Dublin.

What are your thoughts on the Affordable Housing Bill [2021], which was defended by the Minister [for] Housing[, Local Government and Heritage]  as "empowering local authorities to deliver affordable homes [for] purchase on their own lands"?

Yeah, it's kind of interesting because it's doing the opposite of what I was talking about, like. So I'm, you know, saying "give more power back to councils", and at the same time the Minister is taking power away from councils on the disposal of land. He's, you know, forcing councils to give up good land they have zoned for housing to a centralised body, and really it's the opposite that needs to happen.

A lot of the affordable housing stuff still brings in the private sector. And when you're bringing in the private sector you're bringing in profit, and the more you bring in, the less affordable the housing becomes, because the private sector has to make a profit, that's understandable. Well, unless you're kind of willing to do it yourself, then you need to use the private sector and the affordability comes out the window. So really, what the government's been urged to do by opposition and even by its own internal members is to borrow, at a time like now when money is quite cheap to borrow, to borrow more money and build housing ourselves, and forget the private sector. Let the private sector look after the private sector, and let the state look after the state.

But we've mixed up the two for so many years now that we're finding it hard to disentangle ourselves from our reliance on the state.

'''The Residential Tenancies Act [2021] which, as you said, comes into effect today, it ensures that the rent pressure zones can increase with the consumer prices. It has been challenged by the opposition obviously, just because they think that it's unfair on tenants, and that sort of thing. What are your thoughts?'''

Well actually, a lot of the opposition people were in favour, I know Sinn Féin were very much in favour of an inflation rate-related rent change system. I mean, I think it's better than the current system: when you set an upper limit, a ceiling, of what rents can go, so in our case it was 4%, that just becomes a target for landlords. So landlords go, "well, the most I can increase it by is 4%, so I'm just going to increase it to 4%", and everybody does, and then rents go up, and suddenly that's the market rent, so the next year you can increase your rent by another 4%, and the rents all go up and up by 4%.

Look, when you have an inflation one, at least it's more broadly related to your expenditure on everything, and it should take some of the sting. Now, having said that, inflation has been rising over the last few years, so what I would have liked to have seen would have been inflation, related as it is as of today, inflation-related rent increases, but with a cap of, say, two-and-a-half or three per cent on it. I would have liked to see that, because if inflation does take off, and say we get 6% inflation, then we're in a worse position than we were before when it was only 4%.

But in principle, I think I would be supportive of inflation[-related] rent increases. And I think most of the opposition would be too.

You wrote in ' on 24 July, 2016 on the obsolete housing rate "[h]ousing policy deserves a better evidential basis." Could you speak more to this?'''

What I meant with that was, for a start, we didn't know how many houses we were counting every year. We're very bad at data, so we didn't know how many houses we were building every year, we couldn't count them. We didn't really know how many empty houses we had, and we didn't know [of] how many obsolete houses. So, obsolete. So, we have houses that we live in, we have empty houses like vacant houses, so, I'm away on holidays and my house in Dublin at the moment is empty, that's a vacant house, and then we have obsolete houses.

So, obsolete houses are houses that are, effectively, uninhabitable. Houses that we have let fall into a huge state of disrepair, so that nobody can live in them: so there's no water, no electricity. It's just, you know, windows, no rooms, whatever. And we have a huge problem with that. Our rate of obsolescence is about four times the international norm, so we're letting an awful lot of buildings that could be potentially reused go un-reusable, if you know what I mean.

We're letting them fall down. [The computer is moved to the outside of his building.] You see this building here? That is part of an old farm, and that was a building that was almost obsolete, and the people spent some, borrowed some money and refurbished it, and now they rent it out on or whatever. [The computer is brought back inside.] And that's the way to do it, like. It's a perfectly good building, it's a beautiful building. It's huge and it's really nice and it's really well-done, and, like, we have thousands of houses every year that we let fall into a state that they can't be reused. And we didn't know how many we were doing it [to].

So, in other words, we have a potential stock of housing that we're just letting rot and letting fall away, and that's what I was talking about in The Sunday Times, that we need to capture that data about how many houses that we're letting fall obsolete, and get a strategy to reuse them, and to, kind of, bring them back to life. Because not everybody wants a new building, and you can't rely on builders to build every new building, you know, all the new buildings we need. So, we also need to sort of capitalise on our existing housing stock.

'''And who do you think should be held responsible for fixing these dilapidated buildings? Do you think it should be the private sector and the private people or the local government or the national government?'''

I think it's not really a kind of a punishment exercise, if you know what I mean. I think this is probably a situation where a lot of people will have, say, you know, an example, this area I'm in, there's a farm next door and they own this building. Maybe they didn't have the money, maybe some farmers, maybe some people who own obsolete or derelict buildings don't have the money to do it. So I think there should be probably a process whereby we can give them a grant, and help them bring the buildings back to use, and then, you know, over 40 years they can repay the loan or repay the grant or whatever.

But I think it can't be just a punishment, we can't just tax people for letting buildings fall out, I think we need to help them bring them back in use again, as well. So,.

'You wrote again in The Sunday Times'' that September, and in fact, we've actually been talking a bit right now about, you know, Dublin and the cities, the government under the Taoiseach Enda Kenny has been focusing too much "on crowd-pleasing, anti-urban policies that can never work" with regards to its growth centres and. What are some policy ideas you think could work in, you know, de-incentivising that sort of thing?'''



Yeah, so traditionally Ireland has been a fairly rural country, you know, and have dominated politics in Ireland for a long, long time. We didn't have cities like they did in the UK, so we didn't have an. Like, in the UK they were building big cities in the 1830s, 1840s, 1850s like Manchester, Leeds, Birmingham and, you know, London grew and all those kinds of places. We didn't have any of that! Now, Belfast did, which is like 150 miles up the road, because that was part of the United Kingdom and Belfast grew a, industrial city, but Dublin never did.

The Industrial Revolution bypassed us because we've had and prime ministers who had no interest in cities. We don't have an, you know. We don't know how it is to manage a city, we don't even know what a big city really looks like, you know. You come to Ireland and it's like, what we call cities, like, they're just towns, you know what I mean. Like, the whole population of Ireland is just a suburb of somewhere in Singapore, you know what I mean. The scale here is tiny, and we've never had an interest in, kind of, you know, in developing our cities and developing how they should work. So, it's always been, kind of, the rural politicians have quite often got their way.

And not only that, the people we've had managing places like Dublin have often been rural people, people from a rural background. So they're not even city livers or city dwellers: they weren't born in the city, they don't know how it is to live in the city.

So, you know, we've neglected our cities over the years. And it's getting better, but we have neglected our cities over the years. One of the things I think we could do is have lord mayors, with powers over the police and over urban developments and things like that. We don't do that, we don't do local government at all, and I think the most successful things, looking at European and international cities, is when they have strong local government, they have a directly-elected lord mayor, and if I don't like what the lord mayor has done in my city, I'm going to vote them out. Whereas we don't have that here. We have lord mayors, but they're nominal, they're kind of titular honorary kind-of positions; they have no power. So, everything is determined by the, and quite often they are wrong.

Going back to the whole housing supply [question], you know, do you think the government should focus on, you know, incentivising people to move out of Dublin, or starting new jobs outside of cities, or?

Yeah, I mean, for those who want it, absolutely. I think we should, you know, if it takes pressure off big cities, absolutely help them, kind of, move. But there's a caveat, and the caveat is: you don't let people move outside Dublin to live like where I am at the moment, which is a one-off house in the middle of the countryside, right. And if I want to get a pint of milk or a newspaper, I have to get in my car outside, I have to drive five or ten kilometres to the shop, right, and then back here, okay? That's crazy, it's not sustainable, you know, it's not economic, it's not clever. So you can't let them do that, but I think if you let them move out of Dublin and into towns and villages, absolutely, why not?

Repopulate the towns and villages, rather than let people live all over the place.

'The voted recently for an amendment to a bill that would impose a 10%  rate on  or 'cuckoo funds' with an exception if they were purchased for the purpose of social housing. Do you think this will have a noticeable impact on the number of units available?'''

That's a really interesting question, because I think the stamp duty rate, like exempting the funds from the stamp duty rate, is just nonsense, absolutely nonsense. These funds make so much money that paying the stamp duty will have no effect because when they're renting to the state, the state is the equivalent of having, you know, a tenant in your property, okay. The state isn't going to on the rent, the state will look after the property et cetera et cetera.

So they're making so much money off the state, there was no need to cut the stamp duty. Previously, nobody wanted the state as a tenant because they were like "poor people in houses, we don't want them." Now, the s have realised "actually, having the state, having the local authorities and councils as a tenant to take 300 of my properties, that's a brilliant thing! Because they'll always be full, they're going to guarantee me 95% of market rent, and they're going to look after the properties and they will never default on the rent.  The state will not default on the rent, so therefore, it's brilliant!"

So as long as the state keeps doing the crazy stuff of renting properties rather than building properties, these funds will always come. So [it] probably will increase supply, yeah, but it's a bonkers policy because it's like living on your s, you know: you're constantly paying rent, and at the end of 25 years, you don't own the building. So, it's kind of a crazy practice for the state to get into, but that's what they're into.

What do you feel about such a large pre[valence] of international, or just large investment companies' presence in the Irish housing market, overall?

Yeah, I'm a bit worried about it because it's a smaller market, they have a disproportionate effect. In a large country like Germany or, I don't know where you're from. Where are you from?

From [the United States of] America.

In [the United States of] America, a huge market, right? Those funds are, like, so prevalent in the US and in Canada and places like that. I'm quite concerned about them because they tend to have so much money that they can crowd out the small landlords. In Ireland, the majority of our landlords are small landlords: ordinary people who happen to have a property that they rent out to somebody else. Like 90% of our landlords are small, they're not these large funds. I would be worried that these funds will come in, they'd crowd out the small landlords and they won't be competitive.

They won't introduce competition into the market because they're top-end, and they're only interested in the expensive product, and they won't bring down prices because they're not bringing in competition. I would rather they were, like in other countries in Spain and places, they're not allowed to be involved in the residential market. I think that's the correct approach, really.

What are the features of a 'stable' housing market and 'optimal' buying conditions, in your opinion?

To be honest with you, I don't think there's such a thing as a stable housing market really. You know, I've never known a market that's 'stable', not in housing. There's so many various things; housing's not like s and s, you know stocks and shares, they're pieces of paper. Housing is always changing.

The demand for housing is always fluctuating, the type of housing is always changing, our needs are always changing. Other issues impact housing:, , , , that all impacts on housing. So it's different to stocks and shares, which nothing affects really except the market demand.

So I've never known a stable housing market, to be honest with you, but one of the things that causes the greatest amount of instability is the idea [in] Ireland and other countries like us, like the UK and Australia; we have a system called, and that really means that the government will help you buy your house, and then you're looking after yourself. So, my house is my. In Ireland, each man, woman and child is worth something like USD180 thousand each, something like that, alright? More than half of that is in housing, in real estate property. So we rely on our property for our wealth. So when your parents die or when your parents want to send you to university, they can and send you to university, to get a loan based on the.

So we're relying on our houses for our wealth. In other countries, they rely on their housing for shelter. Yeah? I'm not talking about poor countries, I'm talking about a place like Belgium and things like that where the housing is not an asset, the housing is shelter, and like in time you sell the house, you don't make much money on it. Here, we're constantly relying on making money from our housing, so in our heads we always want to see prices rise. And that of course negatively affects everybody else, particularly young people who need to buy a house, so our approach to housing is one of, we know it's the wrong thing that we should be wanting our value [of] our property to rise, but yet, like, we all secretly want it because it means we're wealthier.

And of course, you're doing nothing. Like, the price rises in housing are not anything I've done to my house, it's just because demand in my area has gone up, you know? So, it's kind of, and it's bad to rely on it because we're always looking for things that would keep prices high and not lower them.

Do you think there's any country Ireland can look to as a role model?

Every country except Ireland, I think, and maybe not the US. I think, like, no country has it perfect to be honest with you, and every country that I've looked at in, housing has good sides and it has flaws. I think there's probably more cities than countries that have done so; Vienna does it very well. The city of Vienna is really well involved in the delivery of seven thousand apartments every year for citizens of Vienna, and they get them at a subsidised rent and it's, you know, it's much more affordable.

Places like Copenhagen have also done quite well on s, where people get together to build their houses. I think the like Ireland, the US, Australia, New Zealand, we have a very similar system of asset-based welfare and that's totally unhealthy and that's why we have these booms and crashes and booms and crashes. And unless we start taking the profit element or the asset element out of housing, we're always going to be like that.

So when you look at countries that don't have that kind of of housing, like the Danes and some of the Austrian cities, some German cities, some from the Swiss, you find a much more, this back to your previous question, a much more stable environment where the risks are in other parts of the economy, but not in housing. Whereas with us, one of the major systemic risks to our economy is housing, and it shouldn't be. Housing should be a given, housing should be just something that's there all the time like roads and electricity. But in Ireland it's not, it's up and down and up and down and it's a major threat to the economy.

Do you have any other comments on the state of the Irish housing market?

Well, we often talk about the Irish housing market as being dysfunctional, right? But I don't think there's any such thing as a 'functional' housing market. There's just so many variables, there's so many human, you know, interactions with it. The big variable now, of course, is the international money coming in that we can't control—well, we could control, but we're not controlling it. So now not alone do we have and wages and employment and planning and all those things affecting housing, now we can have  money coming in and effectively telling us what to do, and deciding rents, and so that's another, you know, it's part of, it's part of financialisation.

So, we're kind of constantly leading ourselves down a path which is really hard to get out of. And really what it's creating is kind of, because if you're a homeowner, you are increasingly getting more and more advantages over people who don't own homes, and of course homeownership perpetuates homeownership because, you know, when I die or when I'm older I'll be able to get a deposit together and help children buy their house, and they'll be able to help their children buy their houses. Whereas if you're never a homeowner, you can't do that. So [it] perpetuates social [in]equality.

So, we need to look at housing in a much broader way than just economics and money, we need to look at housing much more in terms of society, planning,  and so on.