Dáil Éireann Debate, Tuesday - 19 May 2026
150. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage to explain why open market value, OMV, is used as the starting price point for the affordable purchase scheme rather than all-in development costs; and to justify this policy in cases where the OMV is higher than the all-in development costs. [37509/26]
View answerI have raised this with the Minister before. It is really to try to understand where this particular policy originated. As he knows, OMV is calculated prior to any discounts being applied for the purposes of affordable purchase schemes. That open market valuation does not necessarily have to be based on the all-in cost of development and in some developments is coming in significantly above that. It is not in the legislation or in any of the statutory instruments. When I discussed the matter with local authorities they told us that they do not know the origin of it. I am looking for the origin and an explanation of why this is the policy.
The new housing plan, Delivering Homes, Building Communities 2025-2030, reinforces and expands the range of existing affordable housing measures being implemented by the Government. In particular, the plan provides for an unprecedented level of State funding in order to deliver an average of 15,000 starter home supports annually between now and 2030. Last year represented a record year in terms of delivery of affordable homes. Through the various affordable supports now available under the Government's new housing plan, more than 17,000 financial supports were provided to help people secure their first home during 2025.
Under the affordable housing fund, which the Deputy is asking about specifically, we hit a record number of new affordable homes completed last year - at more than 900 - right across the country. Even more affordable purchase homes are currently being advertised in Kilbeggan in County Westmeath, Carrickmacross in Monaghan, Kilmacow in Kilkenny, Clonburris in Dublin, and Rathmoylan in County Meath. These are homes made available for middle income families who up to now may have been priced out of the housing market. We need to do more. That is very much acknowledged. We are doing more to get affordable housing built where it is needed and onto the market at prices people can afford.
On the Deputy's question about open market value and how the scheme works at a technical level, the OMV is the reference price used to calculate the value of the affordable home, which in turn determines the level of equity share. The OMV is the best estimate of the price for which the affordable home might reasonably be expected to be sold on the open market. This reflects the value of the asset to the purchaser at any given time. The pricing always reflects the open market value of the home at the time, whether the cost of developing the home is greater or less than the open market value.
In my view, this is the best way to ensure fairness from one scheme to the next. As the Deputy is aware, development costs can vary for the exact same house in the same area for reasons such as the cost of developing a site; one site being more complex and challenging to build on than the other. If under this scheme we used the development cost of the house as the reference point for setting the purchase price, it is more than conceivable that two families under the scheme might end up paying very different prices for the exact same house around the corner from each other.
I thank the Minister for that explanation. The difficulty is that part of the problem is that not only is he not meeting his formal purchase targets, but in many instances the full cost of those properties is exceptionally high. In fact, in some developments it is as much as €500,000 and others, including the ones he referenced in my constituency, it is €440,000 to own the property outright. The difficulty is that by using open market value rather than all-in cost of development, we are increasing the cost to the purchaser and making the homes even less affordable. For example, we do not get any benefits if the land is provided by the local authority, or indeed if there is a significant gap between the development costs and the OMV. Let us take, for example, Glenveagh in Oscar Traynor Road. Those homes probably cost - what Glenveagh was probably paid for those - about €50,000 less than the open market value, so people end up paying far more. There are better ways to deal with the challenges of future sale under the scheme. I just do not understand why the Minister would use a valuation that significantly increases the cost of development when the price of those homes is already too high for far too many working people.
It is an important and indeed an interesting question, and depending on what approach had been taken it would affect prices. With an all-in cost approach we would have had very significant variation in prices depending on input costs. That could lead to dramatically different prices even for apartments in developments side by side. In my view the open market value approach is the correct one as it provides a consistency of fairness. We would have to go through each scheme to find out which side of the costs it would arrive on in terms of the costs to those who would be availing of the scheme.
This is probably the only product in the world where the price you pay for it is not the price that it cost to deliver it, plus profits, but a fictional valuation of an open market value.
As for the only additional question I will ask, the Minister may not be able to answer it because it predates him taking up his current role. At any stage was the consideration of using open market value a concern about the potential impact of an affordable housing scheme on surrounding private market houses? Unlike cost rental where there is a deliberate Government policy - which I support - for cost rental to moderate private sector rents over time as that grows, was that a policy that was deliberately avoided with affordable purchase so as not to have any impact or to moderate rising private market home prices in neighbouring housing estates?
I am not aware but I will certainly enquire.
