The Government's strategy to increase housing supply to meet demand and to improve affordability, particularly for first time purchasers, is proving effective. 2002 was the eighth consecutive year of record housing output, when 57,695 units were completed, an increase of 9.7% on 2001. This increase in housing output is having the effect of moderating house price trends with a reduction in average year on year house price increases from a peak of around 40% per annum in 1998 to more moderate levels currently.
The moderating trend in house price increases when combined with Government measures and other factors, including high levels of economic growth, lower tax levels, increased disposable incomes, increased employment, lower mortgage interest rates and low inflation, has impacted positively on housing affordability. Demographic changes continue to drive the demand for housing, including social housing. The Government therefore remains committed to continuing with measures to boost the supply of housing and in this way seek to bring moderation to the rate of house price increases and also to assisting low-income groups and those with social housing needs by means of the range of targeted social and affordable housing programmes.
Activity is increasing significantly under the affordable housing and shared ownership schemes, which assist households unable to purchase in the private market to own their own houses. Some 882 affordable housing units were built in 2002, about three times the output in 2001, and some 1,686 households benefited under the shared ownership scheme.
Total capital funding for housing of €1.7 billion is being provided this year, a near 7% increase on the amount provided in 2002 which should enable the housing needs of over 12,000 households to be met this year. The provisions under Part V of the Planning and Development Act 2000, as amended, will assist in the delivery of social and affordable housing and the housing initiative included in the new national partnership agreement Sustaining Progress also seeks to increase the supply of affordable housing. In conjunction with the existing affordable housing and shared ownership schemes these instruments will become increasingly important in providing greater access to home ownership by lower income groups in the medium term. The Government is committed to ensuring that the demand for housing is met in a sustainable manner and will continue to monitor and review housing developments and policies as necessary.