We must do more to support first-time house buyers, Donohoe says

Recognition of the challenges in the housing market had driven the Government's actions over recent years, he said.
We must do more to support first-time house buyers, Donohoe says

Vivienne Clarke

Minister for Finance Paschal Donohoe has acknowledged the Government must do more to support first-time house buyers and the challenges they face.

The Government was “absolutely aware” of what needed to be done with regard to housing and to address the issues raised “by so many,” he told RTÉ’s Today with Claire Byrne.

Recognition of the challenges in the housing market had driven the Government's actions over recent years, he said.

“Between 2016 and the end of the last government 80,000 more homes were built, 30,000 families were taken off social housing, and there was a reduction in the number of people who were homeless as well,” he said.

Mr Donohoe pointed out that despite the challenges of the past year 20,000 homes were built in Ireland and that last year the State was the single biggest builder, delivering over 6,000 homes.

The controversy over what had happened with the bulk-buying of homes in an estate in Maynooth demonstrated the challenges facing the sector, he added. Such events underscored the urgency of the situation and what was required to address the challenges facing tenants and first-time buyers.

Mr Donohoe said 0.75 per cent of the housing stock in Ireland was owned by institutional funds while four per cent of tenancies were owned by institutional funds who, he said, had a role to play in the supply of private homes.

“We need to deliver 33,000 homes per year in Ireland, over the next decade. Out of that 18,000 homes need to be delivered by the private sector and funds have a role to play in supplying the capital to build those private homes,” he said.

Mr Donohoe said he did not agree with what had happened in Maynooth. “We need to get the balance between dealing with that kind of behaviour, and try to change the incentives, but also recognising that we do need investment to build more homes.”

When asked about proposals of a commercial stamp duty rate of seven per cent, Mr Donohoe said he would not comment on tax decisions before they are brought to Government, as that could have “all kinds of consequences” for which he would be held accountable.

Pandemic supports

Mr Donohoe also said that economic growth and a return to work this year would pay for “a significant majority” of Covid income support measures.

He said he expected to see economic growth of four per cent this year and the creation of 80,000 new jobs. Next year would see further growth of five per cent and the creation of 200,000 jobs.

“We will recover and I believe we will recover quicker than many anticipate,” he said.

Increasing taxes on work and income would undermine the country's ability to create those 200,000 new jobs next year, he said.

However, Mr Donohoe said that decisions on how to pay for broader public services would have to be made, while still “sensitively” recognising that as the health emergency recedes, the emergency measures in place would slowly need to be changed.

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