Jack Quann
Jack Quann

10.26 5 Jan 2021


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The Housing Minister Darragh O'Brien says he hopes to bring a new equity scheme to help first-time buyers into force later this year.

This would allow the State to take between 10% to 30% of the equity of a home - meaning people could "bridge that affordability gap".

It comes as a new survey shows house price inflation has surged to the fastest pace in almost three years

The latest house price report from MyHome.ie shows annual asking price inflation rose by 6.3% nationally, by 4.8% in Dublin and by 7.2% elsewhere around the country.

Source: MyHome.ie/Davy

Conall MacCoille, chief economist at Davy, said that house price increases were now likely in 2021.

"This quarter's MyHome report points to an acceleration in annual asking price inflation to 6%, the fastest pace in almost three years.

"This pressure has not yet turned up in transaction prices, although the Central Statistics Office Residential Property Price Index rose by 0.5% in October, the sharpest monthly increase in over one year.

"It is probably only a matter of time before the official measure of house price inflation accelerates."

Minister O'Brien told Pat Kenny he is hopeful the new scheme can be used in conjunction with others.

"Not everyone will go for this, this is not the only option for first-time buyers".

He said he is "looking at" allowing people to combine this with other schemes, such as the Help-to-Buy scheme.

"In any transaction, people will have to have their deposit together - I don't see any change in that".

However he said certain details, such as what happens to the State's equity when if and when an owner wants to sell, still need to be worked out.

"There's a number of things like that we are working through that we'll have clear guidelines as to what will happen.

"There are other issues as well that have been raised... if a couple buy a house and, let's say that couple split up or divorce, what happens with it.

"Those type of things we're working through, there are solutions to them."

"But we need to do that alongside with my colleagues in Government - but we're well advanced.

"We haven't had an affordable scheme in real terms in Ireland since the mid-2000s."

As part of the plan, there would also be a regional-type of price cap - to avoid prices increasing because the scheme is in place.

"We'll have to watch that but we'll guard against it", Minister O'Brien said.

"I think the sector will respond well, we need to increase supply".

Plans for 25,000 homes 'at risk'

However he said plans to build 25,000 homes this year are 'at risk'.

"Really fundamentally, then, the big issue is supply".

"I commissioned some research from the ESRI, independently, which shows that we need about 33,000 homes a year to meet the demand that's there.

"We're well off that, frankly".

"In 2021, should the impact of COVID sort of decrease, that we'd be hoping to complete 25,000 homes this year.

"But that is at risk on the basis of what happens with the pandemic, obviously, but it shows the catch up that we have to make".

Minister wants equity scheme to help first-time buyers in place later this year

00:00:00 / 00:00:00

    

Main image: Minister for Housing Darragh O'Brien leaving a Cabinet meeting in Dublin Castle. Picture by: Sasko Lazarov / RollingNews.ie

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Asking Price Inflation Conall MacCoille Darragh O'Brien Equity Scheme First-time Buyers MyHome.ie Pat Kenny State Equity Scheme

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