THE TAOISEACH HAS responded to Sinn Féin complaints about the cost of new homes by saying that most first-time buyers buy second hand properties because of the “obvious reason” that they are cheaper.
During Leaders’ Questions today, Sinn Féin’s finance spokesperson Pearse Doherty raised the unaffordability of homes in Ireland.
He referred to a recent report from the Society of Chartered Surveyors Ireland (SCSI) which found that a couple would need to have a combined salary of at least €127,000 to buy an average new three-bed house in Dublin.
Doherty said the housing crisis has gone from “bad to worse” with sky high house prices and “rip-off” rents.
He noted that the SCSI report also stated that a couple needs a combined income of €115,000 to buy an average new home in Galway and €104,000 in Cork.
“This is just off the wall stuff Taoiseach, it is totally demoralising for people across the state,” Doherty said.
In response, the Taoiseach accused Doherty of creating a “false impression” of the situation.
He noted that the particular survey referred to 3-bed new build homes only.
“Most first-time buyers don’t buy new homes. They buy secondhand home for the obvious reason that they’re less expensive. And many first-time buyers buy 2-beds, not 3-beds,” the Taoiseach said.
“You’re trying to make out that that is the case for everyone when you know it’s not,” he added.
The Taosieach also noted that the survey made the assumption that a borrower could only borrow 3.3 times their income. Borrowers can now borrow up to 4 times their income.
In addition to this, he noted that the survey did not take into account the Government’s First Home (equity) scheme which aims to bridge the affordability gap facing first-time buyers.
Under the First Home scheme, a bank or the state purchases up to a 30% stake in the property, as a de facto loan, alongside the prospective homeowners – who choose to buy back the stake later in their tenure.
However, property price ceilings exist for the scheme and vary across the country. In Dublin for example, the ceiling for a house is set at €475,000.
In response, Doherty said: “We have an affordability crisis. You didn’t mention that the CSO talked last week about the fact that house prices have gone up another 10% in the last 12 months. And that’s the reality, there’s a sizable amount of people that feel locked out of the housing market.”
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