Key Takeaways
| Key Point | What It Means |
|---|---|
| State and investors are buying a growing share of new homes | Fewer newly built homes are available to first-time buyers |
| Housing supply remains too low | Competition for available homes continues to push prices higher |
| The State is helping people through social housing purchases | But it is often buying from the same private market pool of homes needed by owner-occupiers |
| Large developers play a huge role in funding developments | However, they also expect returns, which can reduce owner-occupier access |
| Direct State building could reduce competition | Building homes creates new supply rather than redistributing existing supply |
| The Apple tax windfall presents a unique opportunity | It could be used to create long-term housing assets and infrastructure |
The Irish Times Article Summary
A recent article by the Irish Times highlighted the fact that private buyers are increasingly competing with both the State and institutional investors for newly built homes, with only 1/3 of new homes available to private buyers. (Irish Times)
According to the report, a rising proportion of new housing developments are being purchased by local authorities, Approved Housing Bodies (AHBs), cost-rental providers, and institutional investors.
Now, while these purchases serve important social and economic purposes, they also mean fewer homes are available for ordinary buyers, particularly first-time buyers.
This article raises an uncomfortable but important question: Can housing become more affordable if an increasing share of new homes never reaches the open market?
With some research, we discovered that the answer is not so straightforward. Here’s what we need to consider:
- The State needs to buy new homes from the private market to address social housing waiting lists and homelessness.
- Large Investors often provide the funding required to build these new large developments. And they need to earn returns for the risk they are bearing.
- Ordinary buyers also need access to housing.
The result is that three major groups are competing for a housing supply that remains far below demand.
Practical Example
For years, discussions about housing have focused on supply versus demand. However, Ireland’s housing shortage can also be viewed through another lens.
As we mentioned above, there are effectively 3 major buyers competing for newly built homes:
- Private households
- The State
- Institutional investors
When housing supply is limited, all three groups end up bidding against one another.
Imagine a new development of 100 new homes:
- 30 are acquired by local authorities or Approved Housing Bodies (AHBs).
- 20 are purchased by investors.
- 50 remain available for private buyers.
While 100 homes have been built, only half are available to regular owner-occupiers.
If hundreds of buyers are competing for those remaining homes, prices naturally go up.
This does not mean that the State or investors are solely responsible for rising prices. Instead, it exposes how insufficient housing supply creates competition between groups that have very different objectives.
The State Is Trying to Help, But Is It Making Things Worse?
Here’s what I mean.
At first glance, I thought that it may seem unfair to criticise the State’s role in buying some of these houses away from everyday private buyers. After all, local authorities and AHBs are buying homes to house people on cost-rental and social housing waiting lists.
Unlike private investors, the State is not buying homes for speculation – but to help provide a basic public need. Without them, many families would otherwise remain on waiting lists or in emergency accommodation.
However, a difficult reality remains:
Every home bought by the State from the private market is one less home available to a private buyer. And this is where the dilemma lies.
The State is trying to solve a housing shortage by buying homes from the very market where ordinary people are struggling to buy.
While the intention might be positive, the real outcome still feels like 1 step forward and 2 steps backwards.
Why Investors Are Still a Vital Part of New Developments.
Many people assume that large investors are simply driving up house prices, but the truth is more nuanced.
Large apartment developments, which are very vital now more tham ever, are often extremely difficult to finance.
Construction costs are through the roof, labour is scarce, building regulations have become more demanding and so much more. All of these mean that financing costs have increased significantly.
As a result, many developers rely on institutional investors to provide certainty. Without these investors, some developments may never be built in the first place.
So as you can see, investors therefore play an important role in enabling supply.
The challenge, however, is that investors expect returns.
Once these completed units become rental assets rather than homes available for sale, owner-occupiers have fewer options.
And so again, the issue comes back to supply.
If Ireland built enough homes, investors, the State and private buyers could all participate without significantly reducing opportunities for one another.
The Fundamental Problem – Ireland Is Still Not Building Enough Homes
The Irish Times article ultimately points toward a broader issue, being that Ireland is simply not building enough homes to satisfy demand.
Housing demand continues to grow due to:
- Population growth
- Migration
- Increased life expectancy
- Smaller household sizes
Various estimates suggest that the country needs 300,000 new homes by 2030. Meanwhile, housing supply continues to face obstacles that include:
- Labour shortages
- Infrastructure constraints
- High construction costs
- Planning and development delays
- Financing challenges
As long as supply remains constrained, competition between the State, investors and households will continue.
Why Direct State Building Deserves Greater Attention
Historically, Ireland’s local authorities built large numbers of homes directly.
The State owned the land, commissioned construction and retained ownership. In many cases, it was not competing with private buyers because it was creating its own additional housing stock rather than buying existing stock.
Today, much of the focus has shifted toward buying homes from private developers.
Direct State building could offer several advantages:
1. Additional Supply Instead of Redistribution
Buying a completed home redistributes an existing unit, while building a new home creates an additional unit.
2. Reduced Competition With First-Time Buyers
A larger state direct-build programme would reduce the need for the State to compete for completed homes.
3. Long-Term Public Assets
Every home built remains a public asset for decades. Future generations benefit from the investment long after construction costs have been forgotten.
4. Better Market Stability
A permanent public housing building programme can provide housing regardless of market cycles.
Could the Apple Tax Windfall Help?
If you have been here before, you could tell I would bring this up eventually.
The €14bn Apple tax windfall, which was finally collected in full by the Irish Government in July 2025, is a once-off, non-recurring amount of money.
- It was money that was owed to the Irish State since 2016 by a multinational corporation, Apple Inc.
- This tax was not paid or borne by the common taxpayer; so this fund could be used as an incredible PR tool to help Irish politicians score much-needed political points with the Irish Public while helping them at the same time.
- The Apple Tax is not a foreign loan, so there are no state obligations or strings attached to a foreign lender.
The above reasons are precisely why the Apple Tax should be allocated specifically as a catalyst to resolve the Irish housing emergency, rather than being stored away in the well-intentioned but non-urgent National Development Plan (NDP), where the money now sits.
5 Ways the Apple Fund Could Strengthen Housing
1. Empower Local Councils to Buy, Refurbish & Activate Suitable Vacant & Derelict Housing
It is my belief that if done correctly, it is far easier to bring vacant & derelict houses back into the market instead of building new homes from scratch. There are tens of thousands of underused properties across Ireland.
The state could use the fund to:
- Allocate budgets to local councils, and allow them to buy suitable properties from willing sellers, repair those homes and add them to their social housing stock
- Any income from the rents collected can be reinvested back into affordable public housing
This could revitalise communities greatly by creating jobs, and reduce urban pressure ever so slightly.
2. Expand Direct State Building
The Irish Government could :
- Fund tens of thousands of homes directly
- Use modular / MMC techniques to accelerate housing delivery
- Focus more on cost-rental and social housing
I believe this matters because it could add supply quickly, stabilise prices by setting a lower price benchmark for the Irish housing market, and most importantly – reducing Ireland’s over-dependence on private developers!
Various attempts at capping rents in Ireland have clearly not worked.
So why not try to bring down prices by ‘directly competing with the private market?‘ 🤷♂️
3. Improve Supporting Infrastructure
Now, building public housing at scale is pointless if the infrastructure is not there to support it, ie, transport, water, electricity etc.
As of 2022, 37% of treated water in Ireland was lost through leaks every day due to aged mains. That is 600 million litres of treated water everyday!!
This is very inefficient, and the scale of this problem is a serious obstacle to future housing development.
Now, Uisce Éireann aims to reduce this leakage rate to 25% by 2030 through its Leakage Reduction Programme – and I think the state should support this directly using this fund.
- Various reports have also exposed inadequate transport links, combined with wider infrastructure deficits in electricity, as severely hindering housing delivery at scale in Ireland.
This Apple fund could be a starting step in reducing these deficits, even by just a little.
4. Activate SME Builders
A lack of developers is sometimes cited for the low housing output in Ireland, but that isn’t true.
Ireland does not lack small builders. It lacks conditions that allow them to scale.
Apple Fund Mechanisms:
- Capitalise Home Building Finance Ireland at scale
- Create SME-specific loan guarantees
- Provide viability gap funding for stalled schemes
- Underwrite early-stage risk
This reduces insolvency risk and activates dormant capacity. SMEs are the sleeping giants of the Irish housing market.
5. Strengthen Local Authority Capacity
Planning departments, engineers, housing teams and project managers all play critical roles in housing delivery.
Additional resources could improve the speed and effectiveness of delivery.
Final Words – The Housing Crisis Is Ultimately a Supply Crisis
Private buyers increasingly feel squeezed out because fewer homes are reaching the open market.
However, the deeper issue is not that the State is buying homes nor is it simply that investors are buying homes.
The deeper issue is that Ireland is still not producing enough homes for everyone who needs them.
The State, investors and households are all competing for a limited supply of housing, and until that supply increases significantly, prices will remain under pressure.
Ireland’s €14 billion Apple tax windfall presents a rare opportunity to invest in solutions that could benefit homeowners, renters, social housing applicants and future generations alike.
The above ideas are just me putting my thoughts out there – all in the hopes that industry experts who are much better at this kind of stuff than I am, could improve on these ideas and make a better case for Government to mobilise this 14bn immediately.
This money will not solve the housing crisis, but it has the potential to be a real catalyst that gets the ball rolling for real.
I truly believe that mobilising this money is not impossible. The main issue here – and this is a tale as old as time – is that policy-makers are always unwilling to accept short-term political risk for long-term structural gain.
But at this point, what else have we got to lose?
