Thursday 27 October 2016

Government study of property market 'carried out in-house'

Simon Coveney
Simon Coveney

The Government carried out its own review of the housing market before introducing the new Help-to-Buy scheme, but has not yet published the findings.

Minister Simon Coveney is facing calls from the Opposition to release the details of the study, which was carried out internally.

Education Minister Richard Bruton had told the Dail it was an independent study, but this turned out not to be the case.

The Department of Housing told the Herald it would make available the study of the market that was carried out during the summer, but it had not been received at the time of going to press.

Fianna Fail said it does not believe a proper market impact analysis of the scheme was carried out before the Budget.

Mr Bruton told the Dail earlier this week: "Of course, an independent analysis has been done by the department responsible for developing these programmes."

However, it has emerged that the analysis referred to by Mr Bruton was actually carried out internally in the Department of Housing.

Fianna Fail housing spokesman Barry Cowen said he believes Mr Bruton was being "disingenuous" in his statement.

"I don't believe they have one. What they are terming as a market impact analysis is just a review of the current market," he said.


"Every dog on the street knows that prices are only going to go up on the back of this scheme."

Fianna Fail wants a cost-benefit analysis of thresholds that will allow first-time buyers spending €600,000 on a property to claim €20,000 in a tax rebate.

Mr Coveney has defended the initiative, saying it is linked directly to the value of the house a person is buying.

He said the thresholds were set to avoid a "cliff effect", where someone who spends €400,000 will get a grant yet somebody who spends €405,000 will not.

"We don't expect first-time buyers are going to be buying houses above €400,000 in any numbers at all," said Mr Coveney.

"The focus here is about helping those first-time buyers who are locked out of the market."

The minister said builders are now constructing homes suitable for first-time buyers, so the market needs to be encouraged.

He said he noted a report from Daft.ie that stated the number of web searches for new-build homes shot up by 130pc in the wake of Tuesday's Budget announcement.

"This is having an effect of releasing first-time buyers. For the first time they actually believe they can buy a home again," said Mr Coveney.

Asked about suggestions that developers are already pushing up house prices, the minister said the Central Bank had safeguards to ensure this did not happen.

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