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Budget measures will get young couples taking the property plunge - Noonan

The Finance Minister expects a lot of young couples will “take the plunge” and buy a ...
Newstalk
Newstalk

08.59 14 Oct 2015


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Budget measures will get young...

Budget measures will get young couples taking the property plunge - Noonan

Newstalk
Newstalk

08.59 14 Oct 2015


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The Finance Minister expects a lot of young couples will “take the plunge” and buy a new home, now that Budget 2016 has been unveiled.

Speaking to Newstalk Breakfast this morning, Michael Noonan says people “were waiting for the Budget” and have been waiting to see what moves would be made. He said he “very confident” the budget will help “drive supply” in the housing market.

In yesterday’s Budget Mr Noonan announced measures that aim to have Nama build 20,000 new residential units, which are mostly to be homes, by 2020 – a €4.5bn project.

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“(Nama) are ready to go, they have committed to building 20,000 houses over the next five years. When they’re really up and running after the lead-in phase they’ll be doing 80 houses a week and they’ll be operating on a hundred building sites – most of them in Dublin and it will be mostly houses rather than apartments and it will be at the starter home end that I have asked them to operate.”

It is estimated that 10,000 new units are required per annum to meet Dublin’s demand, with just over 3,000 produced in the last year. Mr Noonan estimates the vast majority of the new homes will be in Dublin.

There was no provision for social housing in the Budget.

Some 4,000 homes are expected to be provided by Nama next year, most of which are ‘starter homes’ – valued at €300,000 or more.

A lack of major construction projects were one cause of the housing problems in Ireland, he said.

“A lot of building sites are now opening in Dublin, around the Blanchardstown area and into Fingal – the problem is the builders are building 12 to 20 houses, rather than the hundreds of houses we need.”

The Budget included no measure for the rental sector, with rumours circulating that Noonan and Environment Minister Alan Kelly had been at loggerheads over the latter’s attempts to help renters.

However, Mr Noonan denied there was any conflict between himself and the Environment Minister over plans to help renters, and says they simply ran out of time on the package being prepared for the sector, with officials from both Departments expected to talk again next week.

Brendan Howlin also played down the extent of any row between the parties over plans for rent controls.

Mr Howlin says both parties are determined to find ways to control rent - and are keen to strike a deal to do so, but an increase in rent subsidies are not an option they are interested in.

"Some people demand for example that we increase the rent subsidy, as if that;s going to solve anything.

"If you increase the rent subsidy all you do is put the rent up and all you knock out the next cohort of people who are managing to pay their rent now, and push them out of the market," he said.

“There hadn’t any fight; it was just that we ran out of time. We had made a lot of progress but hadn’t got the package complete. I expect my officials and Alan’s officials to talk again next week and that he’d have an announcement," Mr Noonan said.

“I went ahead with the measure I control myself – Nama reports to me (so) I had discussions with the senior people in Nama, they put a proposal together and went to their board,” he said.


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