Sinn Féin’s goal of cutting average house prices to €300,000 in Dublin would be “disastrous for home building and buying”, according to Minister for Housing Darragh O’Brien.
His intervention comes after Sinn Féin leader Mary Lou McDonald said an objective of her party in government would be to “get prices as low as we feasibly can”.
In an interview with The Irish Times last month, she suggested average house prices in Dublin should fall to “the €300,000 mark”.
Figures from the Central Statistics Office suggest that the average house price in Dublin is about €430,000 at present.
Ms McDonald dismissed suggestions that seeking a slump in home values was politically dangerous. “The far greater political danger is that we have still an entire generation for whom home ownership is a dim and distant fantasy,” she said.
In a letter to be sent to Sinn Féin housing spokesman Eoin Ó Broin on Monday, Mr O’Brien will suggest that such a fall in property prices would “set back the residential sector by a decade to 2015 levels if home values plummeted by 30 per cent”.
Mr O’Brien argues that almost 300,000 homeowners would see their properties fall below the value they bought them at and “many of these would potentially be sucked into negative equity”.
The number of homeowners is based on the approximately 284,300 residential units purchased since 2015.
Mr O’Brien says home building could “collapse” highlighting how 2015 saw less than a quarter of 2022′s output in terms of new homes completed.
He contends mortgage lending to first time buyers could “dry up by half” saying that just 13,396 first-time buyers drew down mortgages in 2015 compared to 25,196 in 2022.
“Combined with Sinn Féin policy of abolishing the Help to Buy scheme, First Home scheme and vacant property grants this new policy position of slashing home values by €100,000 to €130,000 would be disastrous for home building and buying,” Mr O’Brien says.
[ How to buy your first home in Ireland: The three hurdles to overcomeOpens in new window ]
He says it is incumbent on the main opposition party to present “credible policies” and accuses Sinn Féin of not offering detail on how it would “reduce house prices to €300,000, build new homes at that price or address the fallout of a 30 per cent property value drop shock”.
“Back of the envelop house value goals are deeply irresponsible and may have real world repercussions by damaging confidence in our home-building sector,” Mr O’Brien says.
In a statement Mr Ó Broin said homelessness has reached record levels during Mr O’Brien’s time in office with the latest figures for November showing more than 13,500 people, including more than 4,000 children, in emergency accommodation.
“House prices and rents continue to rise, locking an entire generation out of home ownership,” Mr Ó Broin said.
“The Government’s social and affordable housing targets, too low to begin with, are not being met.
“The Minister would really be better spending his time addressing the housing crisis that Fianna Fáil and Fine Gael created rather than in engaging is silly publicity stunts like this letter.” He added homeless children need homes “not cheap soundbites”.
Separately, Taoiseach Leo Varadkar defended the Government’s efforts to tackle homelessness while saying the number of children in emergency accommodation is “not acceptable”.
“One of the things we have to do and we will do is to continue to increase the supply of social housing,” Mr Varadkar said.
He said more social housing was built last year than in any year since the 1970s. Mr Varadkar said this is the best way to lift people out of homelessness while adding that almost half of people who experience homelessness “are lifted out of it within six months, most within a year”.
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