Help-to-buy scheme blamed for housing imbalance
Policy measures have driven up Ireland’s residential property prices, says ‘Economist’
According to the ‘Economist’ newspaper, recent policy measures such as the help-to-buy scheme are not helping Ireland’s housing crisis. Photograph: iStock
The introduction of the help-to-buy scheme and an easing of loan-to-value restrictions on housing are responsible for creating a housing market imbalance in Ireland.
According to the intelligence unit of the Economist newspaper, the acceleration of Ireland’s residential property prices are likely to have been driven “in part by recent policy measures”.
The note from the Economist also suggested the acceleration could be coming on the back of signs of “rising Brexit-related interest in Dublin from foreign investors and corporates potentially seeking to relocate some of their operations”.
The market imbalance, the Economist finds, comes against a backdrop of constrained supply, record low interest rates and surging rental costs.
Recent figures from the Central Statistics Office show that residential property prices rose by 11.6 per cent year on year in June, the fastest expansion since mid-2015. Average prices in Dublin increased by 11.1 per cent and those in the rest of Ireland were around 11.8 per cent higher.
The research also notes that the number of housing completions and new approved building permits has pushed upwards. In the first three months of this year, 1,387 housing permits were granted, a 6½-year high, while housing completions in the same period was 6,995 – up by 25 per cent on the same period in 2016.