Buying a private house in an Affordable Housing Estate

[thejuggler]

Would you do this?

I understand that there is to be a new housing development launch near where I'm living sometime next year. Approximately 50% of the property wil be private housing the other 50% will be affordable housing. Do you think that the house prices for the private houses will be more competitive than those in a 100% private estate or does it make any difference?

 

[Lauren]

I'd say it depends overall on what suburb it is it? i.e. whats the development close to now?

 

[NiallA]

AFAIK, for affordable houses, people with qualifying incomes effectively get a discount for the purchase of the house. They can then sell it at any time for the full market value, howeer if they make a profit, there is a clawback mechanism to recover a percentage of the profit based on the percentage discount they recieved. This clawback reduces linearly over a number of years (10 i think) to nothing. Ie if someone bought a house worth €300k for €240K they got a €60k or 20% discount. if they then sold the house after year 5 for €340k, they would realise a profit of €100k, but would have to pay back a proportion of that (20% less 2% a year is 10%) so they would have to pay 10% of profit back to the local authority.
Would this affect the prices of the private houses in the estate, NO. All the houses on their next resale will be at market value regardless.