Where is the value in increasing the Help-to-Buy scheme threshold?

Irish Times

12 hours ago

Pre-budget submissions
are all about pleadings. Every special interest group in the State makes a pitch for more resources. They all consider their proposals to be in the wider public and economic interest. Some are worthy, many more are largely self-interested.
This year the whole process appears to have kicked off earlier than usual, perhaps on the understanding that the largesse of recent years is unlikely to be repeated this time around.
In the first place, there is no election. Worries for the medium-term health of Europe's most open economy in a climate where tariffs, trade wars and an absence of consistency on policy are increasingly the norm also will inevitably push Ministers towards a more cautious approach.
And for what money is available, the need is to prioritise investment in infrastructure. Expensive upgrades to electricity, water and sewerage networks that are increasingly being cited by foreign direct investors among factors counting against Ireland Inc are needed.
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An
EY
survey on Friday found that more than two-thirds of Irish businesses 'are worried about securing enough
energy
to meet future needs', which is an extraordinary number.
Put together, it means more things are going to be a tough ask to get over the line.
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First-time buyers in Dublin now locked out of Help-to-Buy scheme, warns Savills
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It seems a strange time then for estate agent
Savills
to be picking CSO house price data to press for an increase in the upper threshold for the
Help-to-Buy
scheme. Savills says
first-time buyers
in Dublin are paying an average of €515,000 for a home, putting them beyond the €500,000 ceiling for Help-to-Buy.
It wants that ceiling increased to at least €621,000 to take account of inflation, it says.
First, averages are notoriously prone to manipulation by singular expensive property sales. Second, the more reliable median data from the same CSO note shows that prices exceed €460,000 only in Dún Laoghaire Rathdown among the four Dublin local authority areas.
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Developers are bluffing when they say lower prices would undermine viability of house building
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Then there is the maximum available tax refund under Help-to-Buy, which is €30,000. Ignoring that when calling for a higher ceiling is not making property more affordable for first-time buyers in general, only for the very wealthy.
It is worth remembering that while the marketing speaks about providing a helping hand for first-time buyers – with even the scheme's name selected for the same reason – Help-to-Buy was from the start a scheme put together to help developers make the numbers stack up on building starter homes.
That's not happening, as supply constraints (and prices rising at their fastest rate in 10 years) attest, so for the State – and those first-time buyers – what is the value of widening the incentive?