DUBLIN (Reuters) - Ireland’s new housing minister said he is concerned a subsidy for first-time home buyers introduced last year may be pushing prices higher and failing to deliver the anticipated new supply amid newspaper reports that it will be scrapped.
New Irish prime minister Leo Varadkar has accelerated a review of the “help to buy scheme” and said that if it was driving up prices, it would be phased out and replaced with incentives for increasing housing supply.
The Sunday Times newspaper quoted a government source as saying the review would almost certainly find the scheme has been inflationary, leading to its removal. The Sunday Business Post also said it was due to be scrapped in October’s budget.
“It is a concern of mine (that it may be inflationary), and it’s a concern that it perhaps hasn’t achieved the delivery on the supply side that we need and that’s why in my review I will be looking at direct supply side measures,” Housing Minister Eoghan Murphy told national broadcaster RTE.
“I‘m going to look at everything. No decisions have been taken.”
The scheme, which provides a tax rebate for prospective homebuyers and is limited to new builds in an attempt to stimulate a chronic lack of supply, is due to run until 2019.
House price growth has begun to accelerate again in Ireland in recent months, climbing 10.5 percent in the year to the end of April, drawing the concerns of EU institutions.
Reporting by Padraic Halpin, editing by Pritha Sarkar