Central Bank governor Patrick Honohan has said a decision on whether to press ahead with the measure is imminent.
“There’s been resistance from different sources. We are trying to see what we can do to achieve the goals of what we set out — are there any elements which need to be re-looked at? The final decision will be taken on this in the coming days and I wouldn’t like to anticipate that, I’m not the only decision-maker. I’m hoping my views [that the 20% deposit should be required] will actually prevail, I’m sure they will, probably.”
Siptu president Jack O’Connor said if the measure was implemented it would make home ownership “the exclusive preserve of the better-off, those able to access inherited wealth, and of serial investors”.
“These plans would put home ownership beyond the reach of thousands of individuals and couples,” he said.
“They are not designed to ensure viable lending practices, but to protect banking investments. They are socially regressive and would serve to exacerbate an already severe housing crisis. They would also place an intolerable burden on individuals and couples planning to buy their own home at a time when average hourly earnings, according to the Central Statistics Office, are still falling — down 1.4% in the year to last October.”
Public Expenditure Minister Brendan Howlin said the decision lay with the governor of the Central Bank, adding that people “could not have it every way”.
“If we want to have a robust financial control system independent of political interference, vested in the Central Bank and governor, we need to do that,” he told RTÉ radio.
However, he referenced a claim by Ann Nolan, second secretary of the Department of Finance, who said the limits proposed were not socially acceptable.
“I imagine there will be a debate about where exactly the proportion should land, whether it should be 80%, 85% or 90%. I think the governor is listening to that debate,” said Mr Howlin.
Fianna Fáil finance spok-esman Michael McGrath said the imposition of a 20% deposit requirement for first-time buyers was excessive and unnecessary and would put home ownership beyond the reach of many.
“Most first-time buyers looking to buy a three-bedroom house in Cork city and suburbs will now be paying over €200,000,” he said. “The new rules would require these first-time buyers to have a minimum deposit of €40,000. In Dublin, these figures would be much higher again. At a time when rents are spiralling, anyone renting in the private sector will find it next to impossible to save a deposit of this level.”
Ronan Lyons, assistant professor of economics at Trinity College Dublin, said that he believed the Central Bank would be happy if the requirement was 15%, or started at 15% minimum deposit, and went out to 20% “maybe over the next 5-10 years”.