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Property prices – who’s to blame?

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4 years ago

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By Michael O’Connor

There are multiple theories as to why house prices continue to reach unfathomable heights.

One that gets a lot of airtime is the role of private equity firms in the market. The generally accepted narrative is that these funds come in, buy up all the available property supply and leave nothing for the rest of us. In reality, this effect is somewhat exaggerated.

It's always a crowd-pleaser when you blame surging housing prices on the big bad investment banks. After all, who doesn’t love to rally behind a ‘Vultures Out’ campaign. As much as I would love to burden them with most of the blame, the stats simply don’t back it up.

The share of total home sales that come from investor purchases has actually been in decline. In 2020, estimates showed that investors make up about 20 percent of housing sales.

Bear in mind that number is not just the share of institutional investors but anyone who isn’t just buying a house as their primary residence.

This 20% includes people purchasing second homes, vacation rentals, individual investment properties, and small investors flipping homes for profit.

In the US since 2011, the cumulative acquisitions from institutional investors has approached 400,000 single-family homes. This may seem like a lot, but with 83 million homes in the US, this represents less than half a percent of the market.

If we narrow our focus solely to the 16 million homes on the rental market, institutionally backed firms only own 2.5% of the market.

In reality, large investors make up just one to two percent of all single-family purchases, while other investors make up 18 to 19 percent.

The numbers show that most rentals are owned by small investors; your neighbours and friends.

To be clear, I agree that levies should be in place to prohibit bulk buying of properties, but simply using private equity firms as the scapegoat ignores the crux of the problem.

As masters of the dark arts of deflection, politicians are quick to point the finger. In reality, money supply, over-regulation, a distinct lack of planning, inadequate funding, and extended periods of undersupply post the Global Financial Crisis are the driving forces behind the current housing crisis but I guess it’s easier to fix the blame than fix the problem.

Where do prices go from here?

I expect home prices to grow more moderately in the coming years as more supply reaches the market, but this will take time. Those waiting for a considerable pullback could be left wanting.

Don’t expect housing to become affordable any time soon.

"If I had to guess, it’s going to be years until we see anything approaching a “normal” housing market. We simply didn’t build enough homes following the last housing crash to meet the demand coming from millennials reaching their household formation years" - Ben Carlson 'A Wealth of Common Sense'

Looking ahead, rising rates could slow things a bit if mortgage rates get high enough. With that said, the central banks are relatively boxed in. Interest rates are unlikely to skyrocket given the effect this would have on the service level of Government debt, but that’s for another day.

Remember, just because you think house prices should fall, doesn’t mean they will. The distinction is vital.

The waiting game hasn’t always paid off.

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Tree of Light ceremony on Monday

The spectacular 100ft Tree of Light in Killarney, festooned with close on 3,000 lights and topped with a giant star, will again illuminate the town this Christmas with the official […]

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4 hours ago

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7 December 2025

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The spectacular 100ft Tree of Light in Killarney, festooned with close on 3,000 lights and topped with a giant star, will again illuminate the town this Christmas with the official switch-on date planned for Monday next, December 8.

The lighting up ceremony will take place after a community Mass in the adjacent St Mary’s Cathedral at 6.15pm and a short prayer service will mark the big switch-on.
The towering Tree of Light is a landmark giant Californian Redwood tree located just outside the main door of the Pugin-designed building.
The project is an collaboration between a sub-committee of Killarney Chamber of Tourism and Commerce and the Killarney parish and it creates a wonderful focal point in the town in the lead up to and during the festive season.
Killarney Parish Administrator, Fr Kieran O’Brien and Christmas in Killarney Chairman, Cllr Niall Kelleher extend a warm invitation to all community groups, schools, clubs and organisations, families and individuals to attend the special Mass next Monday evening or to visit the tree this Christmastime.
The feature star on the spectacular tree will take on an extra special meaning this year as it will be dedicated to the late Donal Grady, a long-serving local councillor and former Mayor of Killarney who worked diligently and passionately for the community.
Donal, who passed away in 2024, was a dedicated public representative who worked with great passion and a real sense of purpose on behalf of his loyal supporters.
Through his work as a long-serving chief fire officer in Killarney, he helped so many families at a time when they most needed assistance and reassurance and he brought a great sense of calm and responsibility to the position
The Tree of Light was first lit to mark the millennium year when it commemorated all those who lost their lives in the conflict in Northern Ireland and it was again illuminated in the mid-2000s to remember those who had been killed on Irish roads.
Since then the project is all about community and it celebrates the fact that Killarney is such a wonderful town to live in.
In the past, the star at the top of the tree has been dedicated to great community activists Johnny Hickey, Yvonne Quill, Paul Coghlan and Rena Kennelly.

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O’Donoghue planning National Rally Championship campaign

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6 hours ago

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7 December 2025

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Killarney’s Colin and Kieran O’Donoghue claimed victory in the Modified section of the Killarney Towers Hotel Killarney Historic Rally, delivering a controlled run in their Ford Escort Mk2 to secure Colin’s second win in the category and Kieran’s first.


At the finish ramp outside the Plaza Hotel on Saturday evening, Colin O’Donoghue confirmed he is considering a step into the Triton Showers Motorsport Ireland National Rally Championship next season.

He said he plans to travel to Mayo in March to see how the opening round suits before making a decision.

O’Donoghue set the fastest time on all nine stages to secure the win over second-placed Chris Armstrong/Conor Smith, also in a Ford Escort.


Third place went to Gary McPhillips and Conor Mohan, 17.9 seconds further back in their Escort.


The Modified section also featured the battle for the Carrick Cup, awarded in memory of Mike Gaine to the fastest Kenmare-based crew over Moll’s Gap.


This year it went to Tommy Randles/Darragh Lynch, who set the pace among the local contenders and finished 35th overall.

Randles, a long-serving club official, has hinted this could be one of his final competitive outings.


The best Kerry Motor Club crew was John Michael Kennelly / Dylan Harrington, who took fifth overall in the Modified division.

Dave Slattery / Denis Coffey continued their strong season with 13th overall (Class 6, 4th), while Hugh McQuaid and Rathmore school teacher Declan Casey placed 15th overall and sixth in Class 6.

Other locals included Seán Enright / Kevin Doherty who were Class 3 winners on the recent Thomond Rally and backed that up here with another steady finish in 26th.


Tadhg O’Sullivan /Frank Byrnes, Seán Hartnett/Kieran Doherty, Raymond O’Neill/Jason O’Connor, Cyril Wharton/Donal Falvey and Ray Stack/Gene Stack brought their Escorts home safely inside the top 40.

Gary Healy/Niall Myers, switching from a Civic to a Toyota Twin Cam 20V, took third in Class 5.


Paudie O’Callaghan/Daniel Murphy brought their Starlet home fourth in Class 4.


Noel O’Sullivan/Nicholas Burke, one of the few crews to have contested every Historic Rally since it began in 1996, finished 50th overall.


Killarney father-and-son team Tom and Mark O’Sullivan completed the demanding event in their Peugeot 205 GTi.

Representing Kerry Motor Club, Ken McKenna / PJ O’Dowd reached the finish in their Peugeot 205.

Kevin O’Donoghue / John McElhinney used Super Rally to return to the stages after mechanical trouble, as did Kenmare’s Shane McCarthy / Eamonn Creedon who were among several crews targeting future Carrick Cup success and completed their Honda EG6’s run under Super Rally as well.

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