Irish Examiner view: Buyers must get price reduction

Home construction incentives

In January, Housing Minister Darragh O'Brien announced a scheme of remedial works on apartments around the country. Picture: RollingNews.ie

Housing remains one of the most pressing issues we face, with the range of associated challenges appearing to multiply on a weekly basis.

In recent days, for instance, we learned that when businesses in Dublin were asked to identify the biggest challenge facing them, 85% of those surveyed nominated accommodation as the most pressing issue.

An extraordinary challenge may need extraordinary solutions, but is one of the measures mooted this week a step too far? We learned that in an effort to incentivise construction, developers will not have to pay fees for services such as water connection. These fees are usually carried by developers, but are to be paid instead by the State for the next 12 months.

It is hoped that this move will bring down costs by €12,650 per unit on average, but as ever, the devil is in the detail: The Government has admitted that it cannot guarantee that the reduction in costs will be passed on to buyers.

This move could be seen as establishing a dangerous precedent if it were not following other dangerous precedents. 

Going back to January, Minister for Housing Darragh O’Brien announced a scheme of remedial works on apartments around the country, a scheme to be fully funded by the Exchequer, which means that those responsible for sub-standard apartments do not have to pay for remediation works.

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Those who bought affected apartments were thus paying for them twice, in the form of the initial purchase price and then again as their taxes pay for the necessary repair works.

This latest proposal also deals a double blow to prospective homebuyers, who will see their taxes cover the costs usually borne by developers without necessarily benefiting from a corresponding drop in price.

It must be acknowledged that the Government is doing this in order to kickstart home building, and that the scope of the accommodation crisis means every possible solution must be considered.

However, reducing building costs by this amount must surely be accompanied by a corresponding downward adjustment in the selling price of homes built as a result. 

Otherwise it can only be described as yet another example of private risk underwritten by public funds.