THE CONSTRUCTION Industry Federation wants the Government to commit itself in the budget to taking an equity share in houses with first-time home buyers.
A delegation from the federation, led by its chief executive Tom Parlon had a 45-minute meeting with Minister for Finance Brian Lenihan during which it argued that the Government should include measures that would help the industry, which has been seriously affected by the downturn.
Mr Parlon told The Irish Times that such measures were necessary to help stem the deteriorating situation facing the sector. He said that while some 45,000 new houses would be built this year, that could fall to as low as 25,000 next year because of the large surplus of stock. That compares to some 90,000 completions in 2006.
“Unless we move the surplus stock, it could be as low as 20,000 next year. That could have a devastating effect,” he said.
The delegation, which included its president Hank Fogarty, outlined the major points of its pre-budget submission to Mr Lenihan.
It emphasised three areas in which the Government could support the sector: a continued commitment to major infrastructural projects like Metro North, new incentives for commercial property and an equity share scheme for first-time house buyers.
“The idea behind the equity share is that the Government takes a 10 per cent share in the property,” said Mr Parlon.
“Banks have become reluctant to lend and many new housebuyers can get only 80 per cent mortgages, they need a 20 per cent deposit,” he added. “If the Government takes an equity share of 10 per cent, if the house is sold within the period of the loan, it will have a charge on the deeds and be entitled to its share of the proceeds.”
Mr Parlon said the commercial property sector needed strong incentives. He said that the stamp duty of 9 per cent had acted as “a major disincentive” for potential buyers and for inward investors.
The meeting with Mr Lenihan had been cordial, said Mr Parlon, and the Minister had a very good grasp of the situation.
He said the delegation was fully aware that Mr Lenihan had some very difficult choices to make but said the Government’s continued investment in capital projects was encouraging.
