Friday 23 March 2018

Almost half of us fear growing property bubble

Niall O'Connor and Fionnan Sheahan

TWO out of five people are worried about the rise in house prices, an Irish Independent Millward Brown opinion poll reveals.

The level of concern is even stronger in Dublin, where half the population is fearful of the expanding property bubble.

Likewise, young people between the age of 25 and 34 are watching the growth in property prices with trepidation, where 45pc say the house-price increase is of concern.

But older people, who tend to own homes already, are less worried about the developments in housing prices.

The poll found divided views on the movement in the property market, with 51pc saying they were not concerned.

The lack of concern is particularly prominent among farmers as well as 35- to 44-year-olds and 45- to 54-years-olds.

The findings come as Tanaiste Eamon Gilmore expressed lukewarm views on the Government's proposal to make it easier for first-time buyers to get a mortgage.

In an effort to kickstart house-building and to allow banks to give out more loans, the State will guarantee a portion of the mortgages to first-time buyers of new houses.

The sharing of the risk will be undertaken through a government mortgage insurance scheme funded by the banks.

The scheme will allow the first-time buyers to buy their homes with smaller deposits by providing mortgages worth 90-95pc of the value.

The lower level of risk to the bank will also potentially lower their mortgage repayments.

The increased level of mortgage funding is expected to provide certainty to the construction industry to build more homes.

In the wake of a negative response to the plans, the proposal has been met with a more cautious response by Labour Party figures.

Mr Gilmore yesterday insisted the measure would be subject to an economic impact study before a decision is taken on whether to implement it.

He said: "One of the issues is the availability of credit to people buying their first home. What's in the construction strategy document is the idea of a mortgage insurance scheme would be looked at, it's a possibility that has to be examined, there is an economic impact study to be done on that."

"Obviously it is one of the areas that has to be looked at but I think you need to look at it in the context of a package that has 75 recommendations."

Labour Party deputy leader Joan Burton said the crucial issue that must be addressed was the supply of new homes.

"Any scheme that helps young people to acquire their home of their own – that many young people properly aspire to – is well worth consideration. But what you actually need is a supply of houses," she said.

Irish Independent

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