Update 5.15pm: The Government’s housing policies are directly causing the surge in prices and the help to buy scheme has accelerated the rise, according to Jan O’Sullivan.
“The rapidly increasing price of housing is a direct result of the policies that the Fine Gael Government, ably supported by Fianna Fáil has pursued over the last year,” said the Labour spokesperson on Housing.
“It is directly resulting in higher prices for the builder, larger mortgages for the banks, and leaving first time buyers and the State to pick up the tab.
“The Help to Buy scheme has added fuel to the surge in prices, with a large number of buyers now chasing a small number of new builds.
“It appears that the changes to the Central Bank mortgage rules have been more than enough to help first time buyers access the market and that the Help to Buy scheme has instead turbo-charged prices.
She says the Government did not carry out any cost benefit, or economic analysis on the Help to Buy scheme.
“The Minister for Finance should now proceed with such a study as soon as possible to see if their policy has adversely impacted on the residential property market.
Ms O’Sullivan highlighted the lack of rent certainty as another reason for rising house prices.
“The lack of rent certainty has also meant that the housing market remains an exceptionally attractive option for investors seeking high returns on rent, meaning prices are rising for second hand homes as well as new builds,” she said.
“The failure to speed up delivery of social housing, introduce an affordable rent model, and deliver on rapid build is also exasperating the situation.”
Update 4.30pm: Simon Coveney has denied that the ‘help-to-buy’ scheme is helping to drive up house prices across Ireland.
Two separate reports published today show house prices were 5.5% higher around the country in the first three months of 2017.
It also puts the national average price of a house at nearly €240k.
Housing Minister Simon Coveney:
“In the last quarter of last year first-time-buyers bought 3,005 properties. Only 297 of them – that’s less than 10% – were new homes.
“If you factor that in to the 47,000 properties that were sold and purchased last year, that’s about two-and-a-half percent of the market is first-time-buyers buying new homes.
“The reason why that figure is so low is that builders have not been building houses for first-time-buyers for years.
Earlier: There are claims Ireland could be facing another housing bubble if the Government doesn’t take action.
It follows the release of two reports in the past 24 hours, showing rising prices around the country.
One of them, from MyHome.ie, has warned today that we could see double-digit price inflation by the end of 2017.
The latest hike is being linked to the Government’s new help-to-buy scheme and the recent change to the Central Bank’s mortgage lending rules.
Darren McKinley from Merrion Capital said there needs to be action.
“If there is to be a bubble it is very much a function of the poor infrastructure around the city and the lack of high-rise apartment blocks.
“We also need better infrastructure from Dublin city centre out to the likes of the airport, Clondalkin, Kildare, Wicklow – that will reduce the commute for individuals and therefore increase the attractiveness of travelling from these areas.”
However the Junior Minister for Housing insists the government is making inroads on the issue of housing supply.
Minister Damien English said house completion figures are going in the right direction.
“Figures for 2015 were 12,000, for last year were just over 15,000 and we know that this year there will be 18,000. That’s a 25% increase year on year but it’s actually a doubling in the last two years, which proves we are addressing the supply.
“But we have to do it quicker and we know that.”
