Mortgage move will affect property market

A few weeks ago Minister Brian Hayes gave an interview in which he highlighted the importance of a stable and functioning property market.

“All our futures are based on getting the property market going again” was his assertion.

However, based on a statement made on Thursday, I can only assume that his boss in the Department of Finance, Minister Michael Noonan, disagrees.

That’s the only conclusion I can draw from his determination to end the mortgage interest relief for first-time home buyers at the end of this year.

There has doubtless been an increase in the number of house purchases as the year draws to a close.

This was inevitable as people attempt to get transactions concluded to avail of this relief. While some in the Government may point to this as some sort of stabilisation of the property market, nothing could be further from the truth.

Once the mortgage interest relief scheme ends, it is likely that the property market will slow and start to decline.

A substantial proportion of recent property transactions have been cash purchases, which will undoubtedly dry up.

Those potential buyers who failed to get mortgages in time to benefit from the scheme will likely pull back from any potential purchases and resume the waiting game.

As these two factors combine to stagnate the property market once again, and transactions dry up leading to falling prices, one wonders if Minister Hayes will still be so adamant about our future being based around the property market.

Simon O’Connor

Crumlin

Dublin 12