The number of people availing of the £3,000 first-time buyers' grant fell by 13 per cent last year in what is being seen as another indication of continued strong investor activity in the housing market.
Figures from the Department of the Environment show that in 1999, some 9,129 grants were paid to first-time buyers at a cost to the Exchequer of £27.4 million. This represents a saving of £3.5 million on the 1998 figures when £31.9 million was paid to 10,439 applicants for the first-time buyers' grant.
Since 1995, the number of new house completions has increased by almost 40 per cent to about 48,000 houses last year. However, over the same 1995-99 period, there has been a 10 per cent decline in the numbers receiving first-time buyers' grants.
The Labour Party spokesman on the environment, Mr Eamon Gilmore, attributed this situation - more new houses but fewer first-time buyers - to the role of property investors.
"While additional houses are now being built, they are not going to first-time buyers but to people who are investing in residential property."
Mr Gilmore also said that another indicator of the strength of investor involvement was that about half of all residential properties were purchased in 1999 by people who had not taken out a mortgage with a financial institution. He said the Bacon Report on the housing market, which contained a number of recommendations aimed at slowing the rate of house price increases, had "failed".
At a meeting of the Oireachtas Committee on the Environment earlier this month, Dr Peter Bacon said that people earning the average industrial wage could no longer hope to purchase their own home. He said that there had been a continuation of the gradual slowdown in the rate of house price inflation in 1999.
A Department of Environment spokesman last night accepted that first-time house purchasers were increasingly moving away from new houses and buying second-hand properties. However, he said another possible explanation was offered by the fact that more people were trading up from existing properties to newly built houses.
A second set of figures released this week indicate that the mortgage interest relief scheme will cost the Exchequer about £154 million in the 1999-2000 tax year. A combination of factors explains the non-increase in the cost of the mortgage interest relief scheme, including a lower interest rate environment and reduction in the lower income rate at which the relief is calculated.