Vol. 465 No. 4
5 Mr. B. Ahern asked the Taoiseach the weighting given to house prices in the consumer price index; and, for purposes of consumer price index calculations, the quarterly increases in the general consumer price index since mid-November 1994 and, within that, the proportional increase in house prices quarterly used by the Central Statistics Office as a factor within the general increase. [9611/96]
The actual purchase of a house is not covered in the consumer price index as this is considered to be a capital acquisition. However, the interest element of mortgage repayments is covered, with a base weighting of 3.39 per cent of total household expenditure.
The quarterly changes in the all-items CPI and the mortgage interest subindex since mid-November 1994 were as follows:
|
Period |
All-Items CPI |
Mortgage Interest |
|
% |
% |
|
|
Mid-February 1995 |
+ 0.8 |
+ 1.2 |
|
Mid-May 1995 |
+ 1.1 |
+ 12.3 |
|
Mid-August 1995 |
+ 0.4 |
+ 1.1 |
|
Mid-November 1995 |
+ 0.1 |
- 4.3 |
|
Mid-February 1996 |
+ 0.4 |
- 4.4 |
Based on the information he has given, is it the view of the Minister of State that the recent rises in house prices could create inflationary pressures? Does he agree with some of the statements made by people involved in the industry in this regard?
Let us not enter into policy matters at this stage.
As the Deputy is aware, we are not talking about the capital cost of a house which is seen as an investment, but the interest element, the changes in which are minimal. Overall, housing accounts for 7.16 per cent of the CPI basket of goods and services. At 3.39 per cent, mortgage interest is the largest item within the housing commodity group. The other items are: rents, 1.52 per cent; local authority charges, 0.18 per cent; housing insurance, 0.65 per cent and repairs and decorations, 1.43 per cent.
I have read the newspaper reports to which the Deputy referred and know that on previous occasions the Central Bank intervened, but there is no evidence on this occasion that the bank sees any need to do so because there is no anxiety.
