New homes soar €45,000 in the hours after Budget
Developers and estate agents have denied that hikes of up to €45,000 on house prices just hours after the Budget are linked to a grant scheme to help first time buyers.
The Help-to-Buy scheme introduced by Finance Minister Michael Noonan on Wednesday offers a rebate on income tax paid in the previous four years, up to a maximum of €20,000, for first time buyers.
Within hours of the Budget speech, a number of houses advertised on property websites jumped by between €17,000 and €45,000.
The Irish Independent identified three new homes, whose purchasers will qualify for the new scheme, which rose in price.
In one instance, a three-bed home in Dungarvan, in Co Waterford jumped by €38,000 to €210,000 on myhome.ie. A second house in the same development went up €21,000.
A house on the same website in Craughwell, Co Galway jumped by €20,000 to €195,000.
Builder S&K Carey, behind the Dungarvan development, said the price increase was a mistake on the website and not linked to the Budget.
The selling agent, Colm Farrell, who is looking after the Galway development also said the price hike was an error.
When asked by the Irish Independent, a spokesman for MyHome.ie said: “The content of the brochure and the price point are a matter for the agent in conjunction with the seller. The agent is solely responsible for updating details of the development such as price.”
The price changes were made on Wednesday just a day after the Budget was unveiled.
Meanwhile, another development in Co Wicklow has also seen significant price rises in the days following the Budget.
New houses in the Thorndale, Delgany, Co Wicklow development rose by up to €45,000 for a five-bedroom home.
Sherry Fitzgerald, which is acting as the agent for the development, said it was normal for house prices in the same development to rise when other houses were sold.
"Now we are getting into the balance of the site," company spokesman Ivan Gaine said.
"The houses are looked at [on] a one-to-one basis and it absolutely looks more than it is but that isn't the case," he told The Journal.ie.
"The 5pc rebate does enhance people's ability to buy, but it doesn't actually increase their buying capacity, their overall mortgage availability. The income multiplier is the income multiplier, and that's the brake," he added.
Meanwhile the Housing Department has defended the scheme. The measures were designed to tackle the problem of first-time-buyers being priced out of the market.
"While the wider market is in recovery at present, there is a risk that increasing prices in response to Help-to-Buy will serve only to maintain that viability gap. "This is clearly bad news for developers - if they want to sell homes they need buyers with actual buying power," he said.
Those taking their first step on the property ladder only accounted for 24pc of the 38,000 houses bought last year, when the optimum level is 50pc of all purchases according to the Department. Of those who did manage to buy only 2pc were handed keys to a brand new house. The initiative is only applicable to new builds, which it is hoped will spur the development of new homes but critics believe it will drive up prices.