Help to Buy sees first-time buyers drive growth in prices
Estate agent DNG said secondhand property market is stalling in Dublin
Dublin property values have stalled, according to estate agent DNG, with virtually no increases recorded over the last 12 months and a slight decline reported in south Dublin. Photograph: Rui Vieira/PA Wire
Close to half of first-time buyers are availing of the Government’s Help-to-Buy incentive, according to estate agents DNG.
The incentive, which allows people to claim back income tax paid over the past five years up to a maximum of €20,000 or 5 per cent of the price of the property, has been critical in helping younger buyers acquire their first homes.
Analysis by DNG for a report published on Wednesday shows that, since the initiative was launched two years ago, 44 per cent of new homes sales to private individuals have used it.
As the incentive is available only for the purchase of new homes, it has also been seen as encouraging developers to increase supply.
DNG says the entry level to the market shows the strongest rates of growth, driven primarily by first-time buyers. Dublin homes valued at up to €300,000 increased by 2.3 per cent over the last 12 months.
This comes against a background where Dublin property values have stalled, DNG says, with virtually no increases recorded over the last 12 months and a slight decline reported in south Dublin.
The report puts the rate of house price growth nationally at just 2.3 per cent, rising to 2.8 per cent when the capital is excluded.
During the second quarter, prices in Dublin for secondhand homes climbed by just 0.1 per cent while a fall of 0.2 per cent was recorded in areas south of the river.
DNG chief executive Keith Lowe said the Help to Buy Incentive scheme was “vital for first-time buyers in the market, a high proportion of who are in rented accommodation”.
Nationally, Border and Midwest regions saw an acceleration in the rate of house price growth while other regions saw the rate of increase in prices ease further.
The commuter counties in the Mideast recorded the lowest rate of regional growth during the six months to June with prices increasing by 0.5 per cent as relatively higher prices and higher levels of new homes completions impacted prices.
Mr Lowe said the “current trend of price stabilisation is positive news for buyers”.
“Given the current level of residential property prices in the capital, there is limited scope for prices to increase at least in the short term,” said DNG’s research director Paul Murgatroyd. “The Central Bank’s macroprudential lending rules are having a significant impact and are keeping the rate of house price inflation to an absolute minimum.”.