Shatter can expose true sales prices for houses
The key question: "Are we getting value for money"
The Government needs to get its act together in relation to housing and or it may not be just household charges that could cause a fiasco.
It is also making a mess of the efforts to bring transparency to the housing market. Minister for Justice Alan Shatter appears to be dragging his heels in relation to getting the new house price data base up and running.
When the legislation to establish the database was passed some months ago it was estimated the database would be operating by the end of June. Now there are concerns that buyers may need to wait until next year before they know the prices for which houses are being sold.
Minister for Justice Alan Shatter has not yet signed commencement orders for the new database.
The delays are adding to uncertainty among some home buyers as to whether they should buy. One of the few positive things to emerge in the last Budget was the offer of extra mortgage interest tax relief for both first-time buyers and other buyers who bought before the end of December this year.
But this move may prove a waste of time as neither the Government nor the market may reap the full benefit from these measures if home buyers hold off buying because they don't know what to pay.
The key question buyers are asking is: "Are we getting value for money?"
And they are not alone.
Last week the chief executive of NAMA Brendan McDonagh raised serious questions about the credibility of the Government's Central Statistics Office index of house price trends.
He felt that either it did not reflect the levels to which prices had fallen or, in the case of houses outside Dublin, prices have further to fall.
Such uncertainty and lack of transparency is not good for the market at a time when so many people are in a stand off.
The banks are accused of being in a stand off on dispensing mortgages and their reluctance to lend is partly attributed to fears that further price falls would reduce the value of their security -- the property on against which a mortgage is valued.
The EU Commission is standing off in relation to whether it should approve NAMA's proposal to offer a guarantee to home buyers protecting them from negative equity in case of further price falls.
Meanwhile the taxi is waiting and the clock is ticking. Already the National Property Services Regulatory Authority (NPSRA) which will operate the database has moved into offices in Navan. The legislation, which took almost two years to get through the Dail and Senate because of the general election, was eventually passed months ago.
So as it takes about six months to compile the initial database and as we are about to enter April it will be October at the earliest before buyers can look to the database for guidance on what price they should bid for a home. By October the Government will be formulating its December Budget.
At that stage the Minister for Finance will deciding whether to extend the deadline for ending mortgage interest relief. But Mr Noonan may not be master of the market's destiny in this respect.
Following the damage that tax incentives have done to the Irish property market, the taxpayers and the banks, the real Taoiseachs -- aka The Troika- may not agree to extend the mortgage interest relief deadline.
After all, they may well argue, if most existing Irish home owners refuse to pay a property tax then why should the Troika approve an extension to mortgage tax relief.
So if the Government want its tax relief to stimulate buyers, it needs to get the database working as soon as possible. Otherwise Ministers will be left with more egg on their faces to add to the omelette from the household charge fiasco.
The database delay cannot be blamed on the sensitivity of the data as the Irish database will not be as informative as the UK database which also shows that a property has a mortgage attached.
Even when the Irish database is established the NPSRA will not publish an analysis of price trends. That's a matter for the Central Statistics Office. If the CSO publishes a new index based on prices after sales completions, rather than as at present mortgage drawdowns, there is a risk the trends information may be further delayed.
But Minister Shatter needs to get the Irish database up and running asap. Afterall the Irish banks are begining to loosen their mortgage purse strings so the database could offer assurances to buyers who want to know they are getting value for money.