Housing minister will ‘assess’ Greystar plans to increase rental prices

Minister for Housing Darragh O’Brien has said he will assess plans by US group Greystar to increase rental accommodation prices across its European property portfolio.

Mr O’Brien said the two per cent rent cap in rent pressure zones was “clear” while acknowledging there is a decreasing supply of private rental properties.

Greystar senior managing director for Europe Mark Allnut told the Financial Times that even a slowing economy would not stop the company from putting up rents in line with inflation due to “chronic undersupply”.

In a statement issued later to The Irish Times, a spokesperson for Greystar said: “The vast majority of our apartments in Ireland have been let and as such they are subject to the 2 per cent cap on rental increases which applies in rent pressure zones. New rents will be set at market rates and once set will of course be subject to the 2 per cent cap.”*

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The company has raised a new fund worth €1.55 billion targeting residential rental accommodation in Europe. Greystar made its first investment in Ireland in July 2019, paying €175.5 million for 268 high-end apartments at Dublin Landings.

It completed its second acquisition last year, paying €177 million for 342 apartments developed by Cairn Homes at its Griffith Wood scheme at Griffith Avenue in Marino, Dublin 3.

Reacting to the reports on Friday, Mr O’Brien said: “I’ve just read the report for the first time earlier on today and I will assess that and see what the situation is there.

“We have been very clear on existing tendencies; the two per cent rent cap is in place.”

Mr O’Brien said he was also conscious of the “continued flight of individual landlords” which was “of concern”.

The Dublin Fingal TD was speaking alongside the Minister for Finance Paschal Donohoe during a site visit of O’Devaney Gardens in Dublin’s north inner city. Over 50 families will begin to move into new homes at the complex before the end of the year, Mr O’Brien said.

He said each affordable home scheme was costed individually and that there were negotiations ongoing in relation to prices at O’Devaney Gardens.

Mr O’Brien said that he would not “get into the individual prices” in relation to O’Devaney Gardens.

“There will be no secrets with any of this,” the minister added. “When negotiations are concluded ... all the prices and costings, like we do with every single scheme, are published and they are very clear and we’re acutely aware of ensuring that there’s affordability there for people.”

Mr Donohoe said details of the scheme would be confirmed “when the negotiations in relation to the city council and others are complete and that information will be made available as soon as possible”.

Meanwhile, Mr O’Brien said interest in the Government’s recently announced First Home scheme had been “absolutely incredible”. He said there had been over 60 applications in the first half an hour of the scheme being launched on Thursday, some of which had already been approved.

The scheme is open to buyers of newly built houses and apartments in private developments anywhere in Ireland. lt provides part of the purchase price to buyers to add to their mortgage and deposit.

The State will pay up to 30 per cent of the cost of the new home in return for an equivalent stake in the property, with the intention that this can be paid down at some future date.

*This article was updated on Friday, July 15th 2022 to add quotes from a statement issued by a spokesman for Greystar