Government starting a new housing bubble?

PBPA TD says Real Estate Investment Trusts (REITS) = a dangerous Tax Scam for the super-wealthy that is creating another property bubble and a social housing crisis

In a statement, Richard Boyd Barrett, TD for the People Before Profit Alliance has responded to news that Hibernia REIT (Real Estate Investment Trust) have purchased New Century House in the IFSC saying that the purchase is evidence that the government are now actively promoting the sort of property-based tax reliefs that created the property bubble that in turn crashed the Irish economy in 2007/8.

Deputy Boyd Barrett said REITs were an extremely alarming indication that only 6 years after the economy was crashed by widespread gambling & speculation in property, the Fine Gael and Labour Government were now pumping up another property bubble to benefit property speculators and the banks, and in the process putting the economy, once again, on a dangerous and unsustainable path.

Deputy Boyd Barrett said that what now appeared to be a deliberate government policy to pump up the property sector was already producing one of the worst crises in homelessness & social housing in the history of the state. He said pumping up property prices and rents, while at the same time abandoning the direct provision of low cost council housing, had the inevitable effect of driving people on low incomes out of the housing market and into homelessness and dire housing situations.

Richard Boyd Barrett said: “It simply beggars belief that only 8 years after the worst economic crash in the history of the state – a crash caused by property speculation – that the government are actively promoting another tax scam to encourage speculation in property.”

“The purchase of New Century House by Hibernia REIT is a frightening symbol of the return of the property madness that has inflicted so much suffering on the people of this country. REITs are encouraging large corporate & super-wealthy speculators to gamble on property and we can already see that this is pumping up the property market with rents and property prices now rising steeply in Dublin and other urban centres.

Taken alongside the fact that this government has effectively abandoned the direct provision of low –cost council housing, & we now have a housing list in Dublin that is 13 and 14 years long, this crazy policy has already unleashed a major increase in homelessness and is fast producing one of the worst housing crises in the modern history of the state.

Yet again, the beneficiaries of this economic madness are the banks, property speculators & super-wealthy investors and the people who are suffering are the poorest and most vulnerable. So while property speculators stand to make huge tax-free fortunes out of captive property market, 6 families a day are being driven into homelessness and the council housing list has spiked to 14 -15 years, leaving many families in dire and insecure housing situations for a major part of their lives. The stupidity of this policy is beyond belief and is a quite sickening echo of the lunacy of that beggared our entire economy.

The only way to have a properly functioning housing sector is for the state to build a very significant stock of low cost council housing itself – both to provide the social housing we so desperately need, but also to regulate the property sector so it does not go totally out of control in the hands of speculators. We have to start screaming about this now before we repeat the disastrous mistakes of the recent past.”