Written Answers. - House Prices.
Proinsias De Rossa
Question:
55
Proinsias De Rossa
asked the
Minister for the Environment and Local Government
if his attention has been drawn to recent comments made by a person (details supplied), in which this person said it appeared that the supply of houses to the property market appeared to be being rigged to push up prices; the inquiries, if any, he intends to initiate into these claims; and if he will make a statement on the matter.
[14674/00]
A detailed evaluation of recent developments in the housing market, including the evolution of housing demand and supply is currently being undertaken by my Department in conjunction with Peter Bacon and Associates. The study will assess short and medium-term projections of housing demand and supply and will make further recommendations for action required to bring supply more in line with demand and to improve housing affordability. It is expected that the report will be completed shortly and will be considered by Government together with a comprehensive policy response, as soon as possible thereafter.
Housing demand has grown phenomenally in recent years due to a number of factors, including strong economic growth, historically low interest rates, increasing employment, rising levels of real personal disposable income, and demographic changes, including high immigration and growth in the key household formation age groups.
Maximising housing supply is the key objective of the Government in order to meet real demand, stabilise house prices and facilitate first-time purchasers. The Government has implemented a comprehensive range of initiatives to this end, and key measures to increase supply include the serviced land initiative, promotion of more efficient land use through higher residential densities in appropriate locations, capital gains tax concessions to encourage faster release of housing land, preparation of strategic planning guidelines for the greater Dublin area, expanding the local authority and voluntary housing programmes, provisions in the Planning and Development Bill to ensure an adequate supply of land for social and affordable housing, and measures to increase building industry capacity. A co-ordinating housing supply unit has also been established in my Department to drive and effectively deliver on the range of measures, to maximise housing output and remove bottlenecks where demand is greatest.
There is strong evidence that these measures are having positive effect, but there is no evidence of supply of housing being artificially held back. Record housing output was achieved in 1999 with new house completions nationally up 10% on 1998, making this the fifth consecutive year of record housing output. Moreover, in Dublin, where the imbalance between supply and demand was greatest, an increase of 12% was achieved, with output exceeding 10,000 units for the first time. There is also a trend of moderating house price increases as indicated by my Department's statistics for the December quarter of 1999.
