One area where statistics are never in short supply is the housing market. The challenge is to interpret them and put them in context and to draw the correct conclusions. The latest figures from the Banking and Payments Federation Ireland (BPFI) show the pressure on first-time buyers from the continued rise in prices. This is leaving an ever-growing gap to fill as they struggle to come up with a deposit and get a sufficient mortgage.
The figures show that around 13 per cent of buyers do so with financial assistance from their families via an inheritance or, much more usually, a gift. In many cases the Help-to-Buy scheme – which provides a refund of income tax and DIRT – proves vital. Higher incomes in recent years are also contributing, giving some people more scope to save the deposit and get bigger mortgages.
Notwithstanding the pressures they face, first-time buyer lending volumes remain high and they are now the dominant force in the housing market.
At the root of the upward pressure on prices is, of course, inadequate supply for the existing level of demand. While home completions have risen in recent years, they are still insufficient in number and an overall spatial strategy is lacking. Apartment building is on the rise in Dublin, partly explaining falling completions, as they take longer to build. Much of the new house building is in the capital’s commuter counties, which accounted for almost one fifth of planning applications in the first half of the year. This is counter to the policy of providing homes closer to urban centres.
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Now the Government is talking about extending and expanding Help-to-Buy in the budget, which risks pushing prices yet higher and wastes cash by helping those who do not need support, as well as those who do. Meanwhile, the vital revised National Spatial Strategy is still awaited, which will have big implications for how many houses are needed, where they are built and the range of policies to make this happen. It will raise some awkward questions – which means we will probably not see it this side of the general election.