John Bruton
Question:16 Mr. J. Bruton asked the Minister for the Environment and Local Government if he will report on the Law Reform Commission's plans to consider legislation against gazumping. [22927/98]
Written Answers. - House Prices.
Proinsias De Rossa
Question:17 Proinsias De Rossa asked the Minister for the Environment and Local Government if he has received a copy of the promised voluntary code of practice to deal with gazumping from the Irish Home Builders' Association; the plans, if any, he has to take further action to control this anti-social practice, having particular regard to the recent decision of Naas Circuit Court; and if he will make a statement on the matter. [24090/98]
I propose to take Questions Nos. 16 and 17 together.
In relation to the reference of the gazumping issue to the Law Reform Commission, I refer to Priority Question No. 4 on today's order paper. As recommended in the Bacon report and accepted by the Government in "Action on House Prices", I raised the question of formulating a code of practice to deal with gazumping with the Irish Home Builders Association. The response of the association has been positive and I understand that they hope to be in a position to finalise and formally approve the code shortly. I will continue to pursue the matter with a view to ensuring the early implementation of an effective code.
Pat Rabbitte
Question:19 Mr. Rabbitte asked the Minister for the Environment and Local Government the percentage increase in new and secondhand houses in Dublin and the rest of the country during 1998; the steps, if any, he will take to control the price of houses in view of the evidence that the Bacon report is not having the desired effect; and if he will make a statement on the matter. [24097/98]
Comprehensive information on house prices for the first half of 1998 in Dublin and the rest of the country is contained in my Department's housing statistics bulletin for the June quarter, 1998, copies of which are available in the Oireachtas Library.
Preliminary figures for the September quarter to be published in the next few weeks suggest a significant slow down in the rate of new house price increases. The rate of increase in new house prices has reduced in the Dublin area from 10.6 per cent in the June quarter to less than 3 per cent in the September quarter and, for the country as a whole, from 4.7 per cent to less than 2 per cent between the same two quarters. The rate of increase in second hand house prices has also reduced but to a lesser extent — in the Dublin area from 13.3 per cent to about 10 per cent and, for the country as a whole, from 11 per cent to about 8 per cent.
The immediate priority in the Government's Action on House Prices was to curb overheating in the housing market while, at the same time, putting in place measures to ensure an adequate supply of housing into the medium and long term. It will take time for some of the measures, particularly those designed to promote housing supply, to have full effect. However, apart from the figures I have quoted there are other indications that the measures taken to curb overheating are having a positive impact. For example, market sources also report some easing of the house prices situation, that investors are no longer pricing first time buyers out of the market and that the number of secondhand houses on the market has increased following the significant reductions in stamp duty rates on the sale of existing houses.
The priority in the period ahead is to maximise the supply of housing. That is essential to meet the unprecedented increase in demand, which is the principal underlying factor in house price increases. Considerable progress is already being made in increasing housing output. The record level of housing output in 1997 is expected to be surpassed again this year, with completions likely to exceed 40,000. The measures in Action on House Prices are designed to secure the continuation of this trend and alleviate bottlenecks or constraints on housing supply. In particular, the significant additional Exchequer funding for water, sewerage and roads infrastructure to open up extra land for housing should yield in the region of an additional 100,000 housing sites over the coming years.
Increased residential densities is a further key element in the Government's strategy to increase housing supply. Planning authorities have been advised to promote higher residential densities at appropriate locations. Consultants have been engaged to undertake a study and prepare draft guidelines on housing density which will be published early in the new year in draft for full public consultation. The reduction in capital gains tax from 40 per cent to 20 per cent for the next four years to encourage faster sales of land for housing development is also helping to increase the supply of land for housing.
Ongoing implementation of the Government's Action on House Prices and monitoring of its effects is a priority for my Department in order to ensure that all measures have maximum impact as quickly as possible. I have no proposals to attempt to impose artificial administrative controls on the price of houses which would, in practice, prove inappropriate and ineffective.