Updated 7.04pm

MORE THAN 120 people have already applied for the government scheme to encourage first-time buyers to purchase a home, after it officially opened for applications this morning.

Revenue said 120 applications for the Help to Buy initiative had been received by 1pm today, with more received in the afternoon.

The scheme, which was announced in last year’s Budget, entitles those buying new-build or self-build homes valued up to €600,000 to claim a tax rebate of up to 5% of the value of the home up to €20,000. The scheme is slated to cost the Exchequer around €50 million a year. Applications are made through Revenue by registering on their website and going through an application process. The rebate will be claimed on either DIRT or income tax.

The scheme is aimed at helping first-time buyers meet Central Bank requirements on deposits, as the rebate can be taken into account by lenders. Those rules have since been relaxed. Around 3,900 new residential units were sold in the first nine months of 2016, compared to 3,400 in the same period in 2015.

Prices

The scheme opens as a number of reports on the state of the Irish housing market are published.  In the final report from property website Daft.ie for 2016, it is noted that there were far fewer residential properties on the market in December than there were the previous year.

A MyHome.ie report shows that median asking prices listed on their site in Cork city went up by 9.5% in 2016, while Galway city prices on their site were up 8.6% for the year.

Another report published this morning from Sherry Fitzgerald, Ireland’s largest estate agents, shows the average value of residential property in Ireland rose by 1.2% in the fourth quarter of 2016.

Marian Finnegan, Chief Economist, Sherry FitzGerald Group says that 2016 was a “turning point” for the Irish market.

The combination of the strengthening demand and limited supply has placed upward pressure on prices. This is most noticeable in rural Ireland with counties like Donegal, Offaly, Roscommon, Westmeath and Wexford all experiencing double digit growth. That said, it should be noted that average values still remain approximately 40% off peak 2006 levels.

A comparison between mortgage drawdown data by the Banking and Payments Federation Ireland (BPFI) and the Property Price Register (PPR) suggests that cash purchasers were responsible for 46% of all residential transactions in the first nine months of 2016.

Additional reporting by Christine Bohan

Read: One city has seen a huge hike in house prices – and it isn’t Dublin