This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
OK
Dublin: 18 °C Tuesday 16 July, 2019
Advertisement

Coveney says including second-hand homes in first-time buyers scheme would drive up prices

The housing minister says first-time buyers are ‘locked out’ of the market.

Housing Minister Simon Coveney speaking at TheJournal.ie's Facebook Live event at Facebook Headquarters in Dublin last night.
Housing Minister Simon Coveney speaking at TheJournal.ie's Facebook Live event at Facebook Headquarters in Dublin last night.

HOUSING MINISTER SIMON Coveney has defended not bringing second-hand homes into the new first-time buyers grant scheme.

The new scheme allows first-time buyers get a tax rebate of 5% on the value of the home they are purchasing up to the value of €20,000.

However, criticisms have been leveled at the minster for only allowing the scheme to apply to new-build homes.

During a Facebook Live interview with TheJournal.ie yesterday evening, the minister said had his department applied the first time buyers support to buying secondhand houses “we would have been rightly open to the criticism that this is essentially fueling the market, it will drive prices up”.

Finite numbers 

Coveney said there are only a finite number of second-hand homes on the market.

“If you increase the buying power of first-time buyers for a finite resource it’ll push the price up,” he said.

He explained the new scheme is aimed at driving supply of new build houses, that first-time buyers can afford.

The new plan will get developers to realise there is now a business case to build a lot more houses targeting first time buyers, said Coveney.

He confirmed the scheme also extended to self-builds.

“We have enough planning permissions in place for 28,000 houses in Dublin and they are not being built, and you have to ask why.

“Don’t forget developers are building estates at the moment, at least half of the houses they are building should be for first time buyers, if not more. That is simply not the case at the moment,” said the minister.

He denied that the scheme will push prices up on new build homes, which Fianna Fáil has suggested.

The minister said understood there were other sectors feeling the impact of the housing crisis – such as those in negative equity and renters.

Coveney said he understood that many were feeling hard done by.

I can relate to the negative equity generation, I’m one of them. Lots of people bought houses… [but] we have to concentrate on the segment that are currently locked out from buying their own home.Those in negative equity – yes, they are in difficulty and under pressure in many cases and they feel very sore about that, but they are in a house and they will see value of the home increase gradually.They will have the choice I hope to trade up or trade down.

Central Bank rules

Touching on the Central Bank rules which commands first-time buyers to have a 10% deposit on the value of the home they wish to purchase, the minister said he would like to see changes in their policy.

I can’t and I won’t tell the Central Bank what to do – they are reviewing those measures, but I don’t expect any major change.
There may be some tweaks and some changes, I think there probably should be, but we do need to be careful to learn the lessons from the past. We cannot allow an overheated housing market spiral out of control again.

He said the new speeded up planning permission rules will not mean bad decision-making when it comes to where houses are built.

Coveney denied that his housing action plan will see Ireland move back to the Celtic Tiger days of bad planning.

We are determined to maintain the integrity of the planning system we are not going to make the mistakes of the past we are not going to have ghost estate built around the country.

He also acknowledged there wasn’t much in this week’s Budget for renters, but said his review of the rental market will be delivered before Christmas.

“We can only do so much in one Budget,” said the Fine Gael minister.

Renters 

He said measures will be introduced to address issues such as security of tenure for tenants as well as creating a “much calmer predictable rental market” for both tenants and landlords.

The minister seemed to rule out capping rents, stating:

If you cap rents in morning you will just see supply dry up immediately.

The minister recommitted to his deadline of next year for getting families out of emergency accommodation. This year, the state will have paid over €50 million on hotel rooms for those in emergency accommodation.

By the middle of next year we are no longer using commercial hotels for families that are homeless.

When told that he is pinning his reputation to such a commitment if he does not deliver on his promises, he said:

I believe in politics you make commitments and then you go after that and deliver on that- any old fool can under promise all the time and therefore not put themselves out there, not take a risk, not put their head above the parapet. That’s not why I’m in politics, I wanted this job because I believe there are solutions to the housing crisis and I want to get on and show we can do that.

WATCH: Simon Coveney and Katherine Zappone answer your questions about Budget 2017 >

 Zappone exploring ways to bring unregistered childminders into new subsidy fold>

  • Share on Facebook
  • Email this article
  •  

Read next:

COMMENTS (49)