Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I will respond to two points that were made, making reference to the PBO report, which I have read. The first charge made against me is that the scheme drives prices. The paragraph relating to this issue in the PBO report states:

The PBO undertook a modelling exercise to examine the impact of the scheme on new properties using data from the CSO. A difference in difference (DID) estimator technique is used to evaluate the impact the Help-to-Buy scheme had on house prices. It compares prices for new properties (treatment group) with prices for existing properties (control group) before and after the scheme was put in place. Overall, the results suggest that the HTB scheme did not have a statistically significant impact on prices.

The Deputy asked whether I took account of this report. She then claimed that this scheme drives prices. The report she is quoting examines the impact of this scheme on prices and concludes that it does not have a statistically significant effect on them. That is significant because the independent report I commissioned on this reached a similar conclusion. While it said that a small increase in prices may have been attributable to the scheme, the primary drivers of house prices remain wider economic conditions and the continuing misalignment between demand and supply. Let us bear in mind that this report, which is being used to anchor a charge that this scheme has led to an increase in prices, concluded that there is no evidence of a statistically significant impact on prices.

I refer to the impact of this scheme on supply. I again quote the report to which the Deputy referred:

When the scheme was announced there were concerns it could increase demand and lead to higher prices, particularly if the supply remained fixed. This would offset any gain made by the buyer as the benefit would be passed onto the seller through a higher price. However, following the scheme’s introduction there was a significant increase in the number of house completions.

It goes on to state that it does not claim this scheme is the cause of the increase in supply. I am not saying that either. I am making the case that this policy has contributed to the increase in supply we are now seeing. Another part of the report the Deputy has been quoting makes the case that any effect on prices is not statistically significant.