THE LATEST HOUSING debate between the Government and Sinn Féin featured on Ireland’s airwaves last night, when the Minister for Housing and Eoin O Broin went head to head on RTÉ’s Prime Time.

The pair clashed on the Government’s record on housing, incentives for first-time buyers and Sinn Féin’s new housing plan, which was launched earlier this week.

We looked at some of the claims that featured during the discussion.

Claim 1: The Government has doubled its housing output since Fianna Fáil took over

In his opening remarks, Darragh O’Brien defended the Government’s record on housing by pointing to what he claimed was a significant increase in delivery since the start of the Coalition in 2020.

“I was very honest with people when I became Minister for Housing that we were taking over a situation where we had ten years of very significant undersupply,” he said.

“In that period of time, we’ve been able to double our housing output, I think this year we will deliver on or about 40,000 new homes.”

Let’s look at the figures.

Data from the Central Statistics Office (CSO) shows that in 2019, the last year of the previous Government, approximately 21,807 new houses were built in Ireland.

The same set of statistics for 2023 - the last full year for which data is available – shows that 32,695 new houses were built last year.

That means that output last year was about 50% higher than in 2019, rather than double the output claimed by O’Brien.

If the Minister’s projection of 40,000 new homes this year comes to pass, then output will of course have almost doubled compared to 2019.

But because figures for 2024 are not yet confirmed, it is inaccurate to claim that the Government has doubled its housing output during the lifetime of the Coalition.

Claim 2: Thousands of people are buying new homes with Government incentives worth €100,000

O’Brien also used his opening comments to take aim at Sinn Féin’s new housing plan and says the opposition party would abolish two incentives if it gets into Government after the next election.

The first of these, the Help to Buy scheme, assists first-time buyers by offering them a tax rebate of up to €30,000 if they purchase a new build home worth up to €500,000.

The other incentive, the First Home Scheme, gives first-time buyers an option for the government and certain banks to pay up to 30% of the cost of a new home in return for a stake in the property.

“All of the supports that have been brought in place by me and by this Government, like the Help to Buy grant of €30,000 [...] and the Shared Equity scheme which is averaging €70,000 – so €100,000 of supports that thousands of people are accessing - Sinn Féin would abolish in one fell swoop,” O’Brien said.

But how many people are accessing each scheme and how much are they worth?

Latest figures from the Revenue Commissioners show that 49,910 people have applied for the Help to Buy Scheme since it was introduced in 2016 up to July (of whom almost 49,000 have already been approved).

The same release shows that more than half (25,485) of those people were eligible for €20,000 or less, with the remainder eligible for up to €30,000 – though this does not mean everyone in the latter half was eligible for the full amount.

Figures for the First Home Shared Equity Scheme are less robust.

In a quarterly update published in July, the company behind the scheme said that just 1,914 people have been able to buy home using the incentive to date.

The same release said that the average level of support received by each buyer was €65,803 – which is less than the €70,000 average touted by O’Brien during the debate.

Although it is clear that tens of thousands of first-time buyers are utilising the Help to Buy scheme, as alluded to by O’Brien, most of them are receiving less than the €30,000 headline figure flagged by the Minister.

It is not known how many of those receiving €30,000 under Help to Buy are combining that with the average €65,000 support received by those availing of the First Home Shared Equity Scheme.

However, with fewer than 2,000 people receiving the latter support, it is likely misleading to state that “thousands” of people are accessing €100,000 from Government supports. 

Claim 3: The Help to Buy and First Home Shared Equity schemes are leading to house price inflation

Ó Broin then responded to the Minister’s discussion of the two incentives by claiming that they are leading to house price inflation.

Asked by host Sarah McInerney whether it was true that Sinn Féin planned to get rid of the Help to Buy scheme and the First Home Shared Equity scheme, the party’s housing spokesperson confirmed that it would.

“The Help to Buy scheme will be phased out over five years; the controversial First Home scheme, which just piles additional high risk debt onto buyers, will be abolished straight away,” he said. “But let’s keep in mind those schemes push up house prices.”

But to what extent is this true?

Despite the claim constantly being used against the Government, it is difficult to know how much the schemes contribute to house price inflation.

House price inflation is influenced by a number of factors, but the most significant are the amount of new houses available to buy at a given time (supply) and the number of people who are trying to buy them (demand).

Since the Government took office in June 2020, the average cost of a new home in Ireland has increased from €257,500 to €345,000 (in June 2024).

During the same period, the number of second-hand homes available to buy fell from 19,510 in June 2020 to fewer than 11,400 in June 2024.

Other factors have been cited by experts as causing house price inflation in recent years, including wage growth, the loosening of Central Bank mortgage rules from January 2023, and savings built up by prospective house-buyers during the pandemic.

It is true that Help to Buy and the First Home Shared Equity Scheme have been in place during that time, but it should also be noted that Help to Buy existed when house prices fell after Covid hit in 2020.

In fact, economist Ronan Lyons recently outlined that even in 2019 – before the pandemic – house prices in every part of Ireland began to stablise and actually declined in some places.

“Given what happened next, this important fact can easily be forgotten: before Covid-19, Irish house prices were falling modestly, because supply had caught up to demand,” he wrote in June’s Daft report on house prices.

This is not to say that O Broin’s claim is without merit; many experts agree that in a constrained housing market, incentives like Help to Buy and the First Home Shared Equity scheme do lead to house price inflation.

In 2021, the Economic and Social Research Institute (ESRI) told an Oireachtas committee that the Shared Equity scheme would “very likely lead to higher house prices” because of an ongoing shortage of housing.

The Central Bank issued a similar warning later in 2021, suggesting that the scheme would create further demand for houses by potentially adding more households to the market when they otherwise wouldn’t be able to afford a home.

Meanwhile, a 2018 study from the London School of Economics also found that a similar Help to Buy scheme in the United Kingdom ”stoked the inflation of house prices” there.

The ultimate problem is that it’s difficult to say exactly how much the two schemes contribute to house price inflation, and whether the various other factors that lead to an increase in prices are more to blame.

Claim 4: Prices for new homes have increased by €100,000 in Dublin for first-time buyers since the Government took office in June 2020

In the same set of remarks about the two housing incentives, Ó Broin also outlined the extent of house price inflation for first-time buyers in Dublin.

“Since Darragh has been Minister, the price for a first time buyer of a new home in Dublin has increased by €100,000,” he said.

CSO figures show that this is correct: the median price of a new home for a first-time buyer in Dublin was €375,000 in June 2020; similar data from June 2024 shows that the same median price had risen to €475,000 - an increase of exactly €100,000.

But does it paint the full picture?

For context, it’s worth noting that there are other figures for price inflation over the Government’s four years in office; the figures cited by O Broin is just a snapshot of inflation for one type of buyer in the most expensive part of the country.

The same data sets show that median house prices did not rise as quickly for all buyers, although they still did increase during the four-year period.

According to the CSO, the median price of a new home for first-time buyers on a nationwide basis (ie not just in Dublin) jumped from €355,000 in June 2020 to €395,000 in June 2024 – 60% lower than the figure cited by O Broin.

And the median price of a new home for all buyers – not just first-time buyers – in Dublin rose from €412,346 in June 2020 to €495,000, an increase of around €82,000.