Joan Burton (Dublin West, Labour) | Oireachtas source

I move amendment No. 20:

In page 21, between lines 11 and 12, to insert the following:"9. The Minister shall, within one year of the passing of this Act, prepare and lay before Dáil Éireann a report on the impact of section 477C "Help to Buy" on prices for new houses in the property market inclusive of an econometric analysis of the scheme.".

The purpose of the amendment is to enable the Oireachtas to properly scrutinise the help-to-buy scheme. When discussing amendment No. 13 I suggested the scheme be introduced for a trial period of one year. The Minister chose to have it in place until December 2019. As he acknowledged in earlier discussions and in the run-up to the budget and as we know from the information made available by the Central Bank of Ireland, the scheme was not given detailed consideration but arose from a strong feeling it would help to stimulate the housing market. While I accept that the Minister proposed it in good faith and that he is optimistic it will stimulate the market without affecting it negatively by driving up house prices, his optimism remains to be vindicated.

In their commentary on the help-to-buy scheme many people who are extremely well informed about the housing market have expressed strong fears that the effect of the scheme will be to increase land and housing prices and that the increases will be quickly absorbed by builders and developers. The modest proposal made in the amendment is to require the Department to prepare a report which the Minister would lay before the Dáil on the impact of the section 477C help-to-buy scheme. The report would examine the property market and include an econometric analysis of the impact of the scheme. People often use hunches when making policy. If we are to believe their commentary, the current British Foreign Secretary, in the case of Brexit, and Mr. Donald Trump, the President-elect of the United States, appear to go on hunches more than anything else.

An analysis of the help-to-buy scheme is necessary because the collapse of the property and housing market in 2008 was a bruising experience for many individuals and families who lost their money and homes or ended up in significant mortgage debt. Until recently, the Minister has made something of a mantra of the refrain that he does not want Ireland to be in a boom and bust cycle. There is a considered view, one which the Minister clearly does not share, that all of the money made available to first-time buyers under the proposed scheme may end up being absorbed by canny builders and developers in rising prices. In my constituency, where a significant amount of housing is being built for the private market at mid-range prices, it is obvious that the announcement of the scheme almost immediately enabled builders and developers to raise prices by an amount roughly equal to the amount first-time buyers were expected to gain from the scheme. This was not the intention of the Minister who intended to provide help and support to enable people to build up a deposit. Later today we will be given some detail on the Governor of the Central Bank's proposals on deposits. If people have paid significant rent from their own resources for an extended period, this should be taken into account in calculating what deposit should be necessary.

I hope the Minister will accept the amendment as it would support his stated position that he wants to make policy decisions based on evidence. From the information available, I do not know why he has abandoned that approach in the case of the help-to-rent scheme.

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