Price increase reports a ‘gross misrepresentation’
DEVELOPERS SAY PRICES IN DELGANY HAVEN’T GONE UP SINCE BUDGET
THE developers of Delgany estate ‘ Thorndale’ have said that pricing on their houses is unrelated to the new ‘Help to Buy’ scheme announced in last week’s budget.
The developers were responding to some media reports that prices had increased by between €17,500 and €45,000 following last week’s budget announcement. In a statement, Kingscroft Developments said that such reports were ‘a gross misrepresentation of the facts’.
The company said that the current advertised prices are in respect of the second phase of their development and that Thorndale is a ‘premium boutique development’ not directly aimed at first time buyers who are eligible for the Help to Buy scheme.
‘Kingscroft decided the prices for the second phase of the development, which is located closer to the village than the first phase, in advance of the budget announcement last week,’ read the company’s statement.
Asking prices range from €427,000 for a three-bedroom house to €620,000 for a five-bedroom house.
‘For the record, any lower prices quoted on house search websites earlier this week were in relation to starting prices for the first phase of the development launched earlier in the year and are historic. Significantly higher prices were achieved on many of the homes sold in the first phase.’
The Help to Buy scheme is in the form of a tax rebate of up to €20,000. While welcomed by many hoping to buy their first home, others warn that it is not the answer to the problem.
‘Before budget day, I warned that giving first time buyers a grant would result in increased house prices,’ said Deputy Stephen Donnelly. ‘The housing problem in Wicklow, and in much of the country, is because there isn’t enough supply to meet demand. The government’s grant just increases demand further, making the problem worse. Prices in Wicklow have already increased by nearly four per cent in the last 12 months. The €20,000 grant lets developers increase the prices of new properties, as now first time buyers can borrow more – and that’s what dictates the price. Of course, it also leaves everyone else further behind, including the negative equity generation living all over Wicklow.’
Deputy Donnelly said that alternative solutions include zoning for more than the current six-year cycles, and taxing vacant, zoned land in high demand areas to stop land-hoarding, as well as investing in infrastructure to newly-zoned land, so that larger scale development can occur.
‘It means coordinating the numerous arms of the State required to do masterplanning. It means ensuring we build sustainable communities, with the proper mix of housing and services,’ he said. ‘If you do all of this, you make things better – more homes, in sustainable developments, at affordable prices.’
The Department of Housing, Planning, Community and Local Government said that builders and estate agents who increase prices in response to the scheme will affect demand.
‘Help-to-Buy is a direct response to a viability gap that exists at present whereby buyers are struggling to be in a position to realise their home ownership aspirations to buy at existing prices.
‘It is intended to translate notional demand into real demand. It is a helping hand for people to comply with rather than side-step the Central Bank lending rules.
‘In doing so, it will also help provide the certainty needed by providers and their investors to proceed with bringing forward the supply of new homes.
‘While the wider market is in recovery at present, with prices already rising, there is a risk for builders that increasing prices in response to Help-to-Buy will serve only to maintain that viability gap.
‘ This is clearly bad news for developers – if they want to sell homes they need buyers with actual buying power.’