Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

This is fundamentally about what is the best way to support people who need affordable homes and whether this is the right measure. On that, we have heard from the ESRI, the Central Bank and senior officials in the Department of Public Expenditure and Reform who have expressed concern that this will increase demand and prices rather than supply. We know from the UK what happened after a similar scheme was introduced, namely, that in the more than four years since the scheme was introduced there, the share prices of the main construction companies that availed of the scheme increased by 230% over the period. We know from looking at the price of homes availed of under this scheme that, if we take the east midlands as an example, while the average first-time buyer bought a home for £157,000, homes sold under this scheme were going for an average of £235,000. In the north east of England, the average first-time buyer was buying in at £109,000 whereas the average home sold under this scheme was at £182,000. Thus we know from the UK that this has pushed prices up.

We have a history of subsidies and tax breaks which developers have availed of and which have pushed up prices and had very serious consequences. We also know we already have an issue with house prices in Ireland. Prices are increasing here at the moment. Demand is already high so we do not need a scheme to increase demand but one to increase the supply of affordable homes. We have the second highest house prices in the EU if one looks at it in terms of square metres and we are being warned this measure is going to increase those prices again. Therefore, I strongly urge committee members to accept this amendment. We must call this out now and not in a couple of years when the damage has been done.