Property prices ‘rooted in boom’ and restrict first time buyers opportunities

A long-time Fine Gael TD says he could not afford to buy a house if he was entering the property market for the first time due to strict Central Bank mortgage rules to prevent another crash.

Bernard Durkan, made the claim as the Oireachtas housing committee was told the cost of building a ‘starter’ home is less than half their market price.

Speaking on the same day it emerged that 3,777 people used emergency accommodation in Dublin since January 1, Mr Durkan said despite receiving an €87,000 salary “I wouldn’t be able to save for such a loan” to buy a good quality new home.

He said the property prices facing first-time buyers are “rooted in the boom” and that such a cost is helping to cause the growing housing and homelessness crises.

The position was rejected by Construction Industry Federation director general and ex-Progressive Democrats TD Tom Parlon, who told the committee the building industry is addressing what is happening.

While confirming the price of building a ‘starter’ property is roughly less than half its market price tag, Mr Parlon said the Government should focus on making it easier for developers to build houses by cutting Vat rates from 13.5% to 9% — a move he said would also cut average house prices by €12,000.

Mr Parlon also said the next Government should cut developer levies and review social housing landbank usage in to free up more space for new homes, moves also suggested by the Society of Chartered Surveyors Ireland and the Institute of Professional Auctioneers yesterday.

However, criticising recommendations, committee member and Anti-Austerity Alliance/ People Before Profit TD Ruth Coppinger said “mortgage holders are still being screwed” and that “developers are on strike and holding the country to ransom”.

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