Pearse Doherty (Donegal, Sinn Fein)
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This is not a good idea. I do not wish to rehash the points I made earlier. First, the Minister should carry out the assessment beforehand. There is no reason for not carrying it out. We are now going on a hunch or a feeling and what the CIF is telling us. That is not good enough. Second, I accept that the Minister must take risks and see how things work, but this is a risk without any analysis carried out. The evidence points to the fact that there will be house price increases as a result of this. That is definitely not the scenario we wish to have. We must try to suppress house prices increasing A number of years ago, somebody in a very senior position in a body responsible for the sale of houses - auctioneers or a body of that nature - appeared before the finance committee and told us that once many of the residual properties were sold we would begin to see an increase in house prices. The point made to the committee was that it was possible to purchase houses on the market for prices that would not cover the cost of building them. We all knew where they were. Apartments were being sold for €50,000. People were in serious distress, the banks took ownership and the properties were sold. The point is that once that started to disappear we were told house prices would start to increase, and that is what happened. House prices have increased incrementally over the last number of months.

When representatives of the Central Bank under the previous Governor appeared before the finance committee and, indeed, in the written documentation provided to the committee, on the need to introduce the macroprudential rules, one of their arguments was that if house prices were not curtailed they would be out of reach and people would be forced to borrow substantial amounts of money. One of the reasons for the introduction of those rules was to try to suppress house prices. I realise the Minister knows all of this, but I say it to make the argument that the acceptance that this scheme may lead to house price increases and that this is somehow acceptable is simply not good enough.

I refer the Minister to the statistics. In the period since last March there has been an increase in the number of mortgage draw-downs or people applying for mortgages from the financial institutions. Young couples are looking at the prices and wondering when is the right time to get into the market. They were seeing the prices continue to drop but now they are starting to increase, so they decide they must get on the ladder and get into the market now. That is what is happening. There is a build-up in the number of people who want to purchase houses and that is starting to move at present.

My concern, aside from the fact that this will lead to price increases and is targeted at the wrong end of the spectrum, is that the statistics from Banking and Payments Federation Ireland show that in September 2016 there were 1,605 first-time buyer mortgages approved by the institutions. The total number of mortgages approved that month was 3,399. It was the same the previous month and similar in the preceding month. There is a steady pattern. The number has been increasing incrementally each month but the figure is generally approximately 3,400 mortgages approved, with 1,600 of them for first-time buyers. Let us say that all of those first-time buyers bought new properties, which means they would all be eligible for this scheme, and that they bought the new properties for €400,000. That would mean the 1,605 first-time buyers whose mortgages are approved every month can get a tax rebate up to a maximum of €20,000. Do the sums. That would cost the State €32.1 million per month. Extending that over the year, it would cost the State €385 million. That is the potential amount of money. The Minister has given us his estimate of what it will cost but if not one additional person was to draw down a mortgage and if the current trend was maintained over a period of years, first-time buyer approvals in a calendar year would be 19,260 mortgages.

The reason I am pointing that out is to show that there is demand there. The figures do not lie.