Business Budget 2017

Saturday 25 February 2017

Home buyers are battling a market that's a total mess

Kevin Doyle

Kevin Doyle

If first-time buyers set up a support group where they could share their experiences, it would probably end in a brawl when somebody scans their mobile phone and spots a recently listed 'dream home'. Photographer: Matthew Lloyd/Bloomberg via Getty Images
If first-time buyers set up a support group where they could share their experiences, it would probably end in a brawl when somebody scans their mobile phone and spots a recently listed 'dream home'. Photographer: Matthew Lloyd/Bloomberg via Getty Images

If first-time buyers set up a support group where they could share their experiences, it would probably end in a brawl when somebody scans their mobile phone and spots a recently listed 'dream home'. That's the competitive market that thousands of young people are facing into at the moment.

Once upon a time, the difficult part for prospective home-buyers was cobbling together a respectable deposit and stumping up the courage to take the plunge.

Now a respectable deposit isn't enough.

A hefty €40,000 to €60,000 is a starting point to overcome the Central Bank's strict new lending rules - and it's only then the real torture begins.

There are virtually no homes to buy. Last night, property website Daft had just 420 newly built homes for sale nationwide.

And of those, a minuscule amount were in the sought-after urban area and most carried prices tags ranging upwards from €400,000.

Hard-pressed workers, including nurses, teachers, gardaí and specialists across the IT and financial sectors, haven't a chance.

But what's the solution? Well, Housing Minister Simon Coveney wants to try to encourage building by making a new €10,000-plus grant available for first-time buyers who opt for new homes.

That sounds great, except by restricting it to new builds he is effectively freezing out the vast majority of prospective buyers who will be looking at second-hand homes.

Planning permission was granted for just over 13,000 new homes last year - a 76pc increase, but far short of the 25,000 units needed.

Of those, 3,592 were one-off buildings and 2,794 were apartments.

At the same time, industry experts argue that creating a free-for-all scheme for first-time buyers will fuel the market and send prices soaring.

Ultimately, thousands of first-time buyers who have been eagerly awaiting the budget announcement are going to be left bitterly disappointed.

Most will have to continue their search without a €10,000 bonus and even if Mr Coveney's plan to drive the construction works it will be 18 months before the results are visible.

It's an unmitigated mess and there is no magic bullet.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business