Dáil Éireann Debate, Thursday - 15 February 2024
255. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the degree to which the various forms of assistance available for first time house buyers are upgrading satisfactorily without contributing to house price inflation; and if he will make a statement on the matter. [7379/24]
Amharc ar fhreagraHousing for All is providing prospective home-owners with housing options they didn’t have when the plan was published two years ago. These options include Government supports for first-time buyers such as the Local Authority Home Loan, Ready-to-build and the First Home shared equity scheme, all of which are assisting those aspiring to purchase their own home to do so.
In this context, first-time buyer activity remains particularly robust, with recent data showing a year-on-year increase in the number of homes purchased and mortgage drawdowns by first-time buyers at their highest level since 2007.
At the same time, the growth in residential property prices has moderated significantly, down from a high of 15% in March 2022 to 2.9% nationally in the year to November 2023, while there are also recent signs the annual rate of growth in the prices of new homes has begun to moderate.
The housing market is a complex landscape and it is particularly challenging to isolate the effects of subsidies and other supports for first-time buyers from concurrent factors such as income growth, inflation in construction materials and the availability of second-hand and new homes in specific local markets. That said, an independent assessment of the 'Help to Buy' tax incentive, completed in 2022, suggested that that incentive had no discernible impact on the overall prices of new homes for first-time buyers.
Importantly, any inflationary pressure exerted by such subsidies and other supports is likely to be minimal and outweighed by the benefits of those supports, including reversing the declining trend in homeownership among younger demographics.
