Dáil Éireann Debate, Wednesday - 9 February 2005
159 Mr. P. Breen asked the Minister for the Environment, Heritage and Local Government the impact which changes made in budget 2005 to benefit first time buyers is having; his views on whether this impact is enough to alleviate hardship and barriers to entry into the housing market; and if he will make a statement on the matter. [4064/05]
View answer178 Mr. Crowe asked the Minister for the Environment, Heritage and Local Government if his Department is monitoring the impact on house prices of the changes introduced in budget 2005 in relation to stamp duty; and if he will make a statement on the matter. [3809/05]
View answer
I propose to take Question Nos. 159 and 178 together.
The stamp duty reductions for first-time buyers announced in budget 2005 are assisting affordability for first time buyers by easing the financial burden faced by such buyers of second-hand homes with savings of up to €12,000 in some cases. This is helping some first time buyers to afford a starter home who might not otherwise have been able to do so, and is helping to open the second-hand market more to first time buyers who had previously been deterred by the impact of stamp duty.
The major driver of house price increases in recent years has been the unprecedented demand for housing fuelled mainly by rapid economic growth and demographic changes. Relative to these factors and the level of housing supply, the influence of stamp duty changes on house prices is likely to be more limited. However, these reductions in stamp duty for second hand houses should have a restraining effect on new house prices by removing distortion between the two categories, and reducing the degree of concentration of first-time buyer demand on the new house market. The Government will ensure that effective policies and measures continue to be applied and reviewed as necessary, with the overall aim of meeting the broad spectrum of housing need in the context of balanced and sustainable growth of the housing market.
