The Social Protection Minister has called the government’s new help-to-buy scheme “a risk” worth taking in order to increase the property supply.

Leo Varadkar said it is worth risking higher property prices if the scheme can encourage developers to get building.

“The real reason why people can’t get houses now at the moment is that there just is no supply,” he said.

“Couples are out there looking at houses and apartments and they are meeting the same people for weeks and weeks.

“We hope this will generate an increase in supply much more so than any increase in prices that might arise.”

Under the scheme, first-time buyers will be able to avail of a 5% tax rebate paid over a four year period.

The rebate applies to new builds up to a maximum value of €400,000 – meaning the rebate could be worth as much as €20,000.

The scheme has come under fire from opposition parties with concerns that developers will simply respond by increasing the price of new builds.

First-time buyers purchasing a property worth up to €600,000 are also entitled to avail of the scheme, although the rebate will be capped at €20,000.

Fianna Fail housing spokesperson Barry Cowen has labelled it a “mansion grant”, pointing out that anyone buying a home for €600,000 would likely need and income of “at least €145,000 – four times the average industrial wage.

But Minister Varadkar said the benefits of the scheme will outweigh any difficulties: