Dáil Éireann Debate, Wednesday - 2 November 2016
101. Deputy Pearse Doherty asked the Minister for Finance the assessment that was carried out by his Department on the impact on supply and demand conditions in the housing market of the help-to-buy scheme announced in budget 2017; and if he will make a statement on the matter. [32537/16]
Amharc ar fhreagraThe potential impact of the Help to Buy incentive on supply and demand conditions in the housing market was considered by my officials as part of their analysis of the proposed scheme and the design of the relevant parameters of the incentive. Among other issues, officials also considered the potential impact on land prices, demand, and potential mortgage lending.
The introduction of such a scheme was considered as only one component of the full list of measures provided for in 'Rebuilding Ireland - The Action Plan for Housing and Homelessness' which was launched last July. It is in this context that the Help-to-Buy scheme should be considered. Its role is to complement the other measures in the Action Plan. The extent to which the market responds will very much depend on the speed and efficiency with which structural supply constraints are eliminated and residential building activity increases. Therefore, the impact of the Help-to-Buy scheme cannot be considered in isolation from the impact of other measures contained in the Action Plan, which are primarily designed to increase supply.
It is expected that the Help to Buy scheme will increase the demand for newly built houses, by converting notional demand into real demand, through enabling first-time buyers' to meet the requirements of the Central Bank macro-prudential rules, more quickly. Accordingly, developers who may have been struggling to borrow funding to build houses will be in a better position to do so, and thus will be able to generate the desired supply side response.
