Joan Burton plays down value of first-time buyer grants

Tánaiste Joan Burton has played down the value of first-time buyer grants to help urban couples get homes after a warning from international experts this could cause an even further spike in property prices.

A leading international think-tank warned the Coalition about the risk of cutting taxes and increasing spending yesterday.

The Organisation for Economic Co-operation and Development (OECD) urged the Government to use the revival in economic fortunes — the fastest growth in Europe — to solve the legacies of the country’s bankruptcy and reduce unemployment.

The Paris-based group also raised concerns about the rapid rise in property prices, both commercial and residential, and warned that subsidies for first-time home buyers would cause a further spike in prices and make it even harder for lower earners to get on the property ladder.

Labour TDs earlier this year proposed the introduction of grants between €3,000 and €5,000, which would help buyers overcome the Central Bank’s new 20% deposit rule for purchasers.

Ms Burton said yesterday that no decision had been made yet on first-time buyer subsidies, but she also pointed to how such grants had previously not served young buyers.

“We know the previous history of that, in that it went to builders. The issue of young people and others where traditionally they would have been able to afford to buy a house, clearly that’s something that we want to see people that are in that position being facilitated in terms of finance, there are a number of ways of addressing [this].”

The OECD also set out the top five risks for the future of Ireland’s economy.

These include a slower trend growth in the world economy, another property sector boom and bust here, changes in the international corporate tax regime, contagion from renewed Euro area turmoil and the risk of Britain leaving the EU.