Return of ‘specuvestor’ threatens a new bubble
Property ‘specuvestors’ are returning to the market in Galway in an effort to cash in on rising prices, a local TD has claimed.
Galway Labour Deputy Derek Nolan has warned that lessons should be learned from the property boom, and that the same mistakes cannot be made.
He said that cash buyers are “swamping” the local market, which already has a shortage of quality family homes.
Local estate agents agree that these factors, coupled with the return of so-called specuvestors (speculator-investors), are causing price increases in certain parts of the property market in Galway.
Deputy Nolan said: “Huge numbers of cash buyers are swamping the market.
“And a further small cohort are again playing the market, in expectation of making a quick buck from rapidly increasing prices.
“Now is the time to discuss our response. In any discussion on housing, we must first and foremost recognise that housing is not a luxury, but an essential of peoples’ lives.
“The market has a track record of failure on this matter. It must not be allowed to repeat it. We need a real and meaningful policy that is radically different,” said Deputy Nolan.
He said that the introduction of a meaningful policy on house prices is needed.
“Now is the time to start talking about how we view housing provision in our society. Is housing a commodity or a social need?
“I don’t want to see a return to an Ireland where it was accepted that people crippled themselves with debt, just to provide a home for their family. A mortgage that lasted for 35/40 years was a given and was considered the norm.
“Allowing the market to once again hold dominance in any discussion on house prices runs the risk of repeating mistakes we previously made.
“The consequence of runaway house prices was not just the catastrophic boom and bust. We also saw huge pressure on inflation from mortgage and rent costs.
“This resulted in wage demands and a loss of competitiveness. And crucially, house price inflation saw a huge diversion of wealth and capital into housing that could have been used to fuel productive enterprise and sustainable growth in the real economy.
“There is now a shortage of quality, affordable family homes in urban areas such as Galway. Lower supply is meeting increased demand,” said Deputy Nolan.