IPAV calls for €10,000 homebuyer scheme

The country’s auctioneers representative group, IPAV, has called for a €10,000 deposit subsidy scheme to help first-time buyers get on the property ladder.

The once-off incentive would make homes more affordable for those looking to buy their first property, the organisation said.

IPAV is in favour of watering down the Central Bank’s mortgage lending rules which it has claimed are locking prospective homeowners out of the housing market.

“The recent decline in the housing market needs to be arrested and reversed,” said IPAV CEO Pat Davitt at the launch of the organisation’s pre-budget submission.

“In the seven months to the end of July 2016, there was a drop of 9.76% in sales, down to 24,509 from 26,904 in the same period in 2015, according to the Residential Property Price Register.

“Dublin sales were down a massive 14.75% in the same period.”

The deposit subsidy would be paid on a one-off basis and would be repaid to the State if the property was resold within five years.

The result would be to reduce the sum required for a deposit on a €220,000 house from €22,000 to €12,000.

The scheme is similar to that flagged by Housing Minister Simon Coveney, who plans to give first-time buyers up to €10,000 in a tax rebate in next month’s budget.

The scheme has been criticised by property experts who fear it could re-inflate a property bubble, however.

The European Commission also advised against the plan, labelling it “costly and counterproductive”.

“Demand-side measures could contribute to further upward pressure on prices,” the commission added.