Pearse Doherty (Donegal, Sinn Fein)
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86. To ask the Minister for Finance if, in view of the ongoing increases in house prices, he will abolish the help-to-buy scheme; and if he will make a statement on the matter. [1737/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the 'Help to Buy' incentive was initially announced on 19 July 2016 as part of 'Rebuilding Ireland: Action Plan for Housing and Homelessness'. This plan contains a significant volume of responses to the current housing crisis, of which the Help to Buy incentive is one.  This comprehensive Action Plan takes a holistic approach in addressing the many interacting structural constraints affecting the housing market in areas such as planning and land use, as well as regulation and skills deficits in the construction sector. While the primary focus of the Action Plan is to tackle structural constraints, fiscal supports can play a supporting and time-bound role in addressing the current problems in the housing sector.

It is in this context that the Help-to-Buy scheme should be considered. Its role is to complement the other measures in the Action Plan. The extent to which the scheme could lead to an increase in residential property prices will very much depend on the speed and efficiency with which structural supply constraints are eliminated and residential building activity increases. Therefore, the impact of the Help-to-Buy incentive on property prices cannot be considered in isolation from the impact of other measures contained in the Action Plan, which are primarily designed to increase supply.

I wish to assure the Deputy that my Department continues to monitor developments in the property market including property prices on an ongoing basis. However, the Help to Buy incentive, which came into effect at the start of this month, has been introduced for two reasons - to assist first time buyers in putting together the requisite deposit to buy a home, and to encourage the construction of new homes. As such, I am not willing to abolish the Help to Buy incentive so soon after implementing it as this would not create the conditions to encourage the construction of new homes.

I have already committed to commissioning an independent economic impact assessment of the Help to Buy incentive which will look at, among other issues, the impact on property prices. However, it should be remembered that the high rates of house prices reflect the supply constrained nature of the Irish residential market, and were an issue over the past number of years rather than since the start of the Help to Buy incentive.