First-time buyers will be denied a chance to buy almost 300 homes at one of the local area’s newest developments.
This is after housebuilder Cairn Homes recently announced the sale of 229 residential units in Shackleton Park, Lucan to a cuckoo fund owned by a Wall Street financial giant.
These so-called cuckoo funds, described as such because they are seen to elbow in and push first-time buyers out of the market, are Private Rented Sector funds backed by institutional investors.
The homes are being sold for €78.75 million to a special purpose company managed by Carysfort Capital and funded by Angelo Gordon, a US based global alternative investment manager.
The development, which consists of a mixture of apartments, duplexes and houses, is part of one of Cairn’s biggest residential schemes consisting of 1,000 homes.
The practice of selling homes to cuckoo funds, who then rent them out, is becoming more common in this country and this is the latest in several such deals.
The behaviour of cuckoo funds in Ireland has even drawn the ire of the United Nations.
In an accusing letter to the Government last year, the UN special rapporteur on housing Leilani Farha said that “financialisation of housing” here is making Irish housing unaffordable.
“Almost overnight, multinational private equity and asset management firms like Blackstone have become the biggest landlords in the world, purchasing thousands and thousands of units,” the letter said.
“Pouring unprecedented amounts of capital into housing, they have converted homes into financial instruments and investments.”
Some local representatives have also criticised the decision of Cairn Homes to sell the whole estate in Shackleton Park to a cuckoo fund.
Dublin Mid-West Sinn Fein TD Eoin Ó Broin told Dublin Gazette he believes a change of approach is needed by Government.
“I share your concern with the purchase of tranches of residential properties by short term investors,” he said.
“There are two key problems here.
“Firstly the rents they charge are far too high for working families or aspiring first time buyers.
“Secondly the nature of the funds is often not to provide long term affordable rental accommodation but short t erm capital gains increasing the insecurity in the rental market.
“Both I and my colleague Pearse Doherty have been raising these concerns in the Dáil for a number of years and calling on Government to end the tax incentives that facilitate these kings of funds operating in this way.
“We urgently need a change in approach by Government to ensure an adequate supply of affordable purchase and rental properties for working families and aspiring first time buyers.
“We proposed a range of ways of doing this in our Alternative Budget and will be doing so again in the upcoming general election.”
Dublin Mid-West People Before Profit TD Gino Kenny also expressed anger over purchase of the Lucan homes.
“This move is yet another step in the wrong direction for the housing market in the area,” he told Dublin Gazette.
“The wholesale purchasing of estates by vulture funds is skewing the market against families who are looking to buy a home in the area.
“The rents charged by the fund will more than likely be well above what most families can afford and those moving in will more than likely rely on HAP payments to subsidise the rent.
“Rents in Lucan are well above the national average and we need the government to provide funding for social housing and real affordable homes.
“What we don’t need is more vulture funds charging extortionate rents and paying pittance in taxes.”