A shared ownership scheme could help address issues of affordability in the housing market, AIB has argued.
In a new paper published today, the bank says the Irish housing sector has made significant progress over the past number of years, with an increase in supply, a moderation of price inflation and an apparent slowdown in rental cost increases.
But is says that while that increased supply has played a part in reducing the rate of price increases outside of the Dublin area, it has had little impact in the capital itself.
While regulatory constraints and affordability troubles, not supply boosts, have begun to hold back rent increases, the paper argues.
As a result, the document proposes, a shared ownership or equity loan scheme could address some of the challenges around affordability, particularly for the key worker segment of the workforce.
These, it says, are people whose earnings are too high to allow them qualify for social housing, but too low to enable them to qualify for a mortgage.
But the bank also acknowledges that any such scheme would have to take account of the Central Bank macroprudential mortgage rules.
"We believe there is a large amount of households on average incomes that could potentially afford home ownership but are constrained from doing so," said Donall O'Shea, Head of Real Estate Finance at AIB.
"Consequently, there is merit in considering the introduction of schemes such as shared ownership or shared equity schemes in the Irish market that targets the affordability segment."
Mr O’Shea added that careful consideration would have to be given to the design of the features of such a scheme.