With an attempt to lift the housing market out of the current crisis it’s in, the Irish government is left to answer one very important question. Is the Help to Buy scheme even helping?
Or…is it worsening the gap of the home hunters who are looking for the ability to buy?
As what is already well known, house prices are soaring. Without the supply of housing increasing at any fast rate, this will continue to be the case.
Therefore, home prices are continuing to rise, much faster than incomes are rising, and the gap between available homes and affordable homes is continuing to worsen.
When looking at reports from CSO, the average wage in Ireland is €45,075 for a full-time employee. That number is, however, much lower as a median, where most of the working class clusters. The median is found at €28,500. A drastic difference and even more of a surprise when finding that, that means, nearly half the population is below that number.
This is where the Help to Buy scheme comes into play.
Introduced just earlier this year, it was designed solely for first-time buyers who are coming to the realization that buying is still quite out of reach.
Through research and surveys since the scheme has officially been an active role in the market. It can even be suggested that perhaps the Help to Buy scheme is helping more people who would have boughten homes anyways, rather than those that can actually not afford to do so.
Many people with these found average and median incomes are even priced out of the renting sector. Again, causing more questions to be raised.
Though other factors are to be at fault for the declining home ownership, it all primarily comes down to the affordability of the property. The ability to pay for the cost of a mortgage may also offer some of the impacts.
The affordability gap is continuing to worsen as property prices continue to increase and incomes stay relatively stagnant.
The lack of homeownership is primarily seen in first time home buyers, attempting to enter the market for the first time.
The Central Statistics Office has published some useful numbers relating to the trends that the homeownership market has been seeing.
Today, approximately 30 percent of households, with the heads of the households aged 25-34 years old own their home. This may mean nothing at first glance, but, when compared to 1991 numbers in which 68.4 percent of households owned their home, it is easier to understand just how substantial the decline really is.
Though a definite and official report has not yet been released, it has been rumored that the governments help to buy scheme has not been effective in increasing home ownership but…Home ownership has actually fallen since the Help to Buy Scheme was introduced.
When the Help to Buy scheme was newly starting out, the backlog of applicants was so high, it was predicted that the budget for it would quickly run out. Making these findings quite surprising to the many supporters of the scheme.