Tuesday, 3 February 2004

Questions (25, 26)

Seán Crowe

Question:

154 Mr. Crowe asked the Minister for the Environment, Heritage and Local Government if the Government has begun to reassess its position regarding house prices in view of the fact that, contrary to Government statements, over the past 18 months house prices have continued to rise, and rose by 13.7% in 2003 alone; and if he will make a statement on the matter. [2973/04]

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Thomas P. Broughan

Question:

204 Mr. Broughan asked the Minister for the Environment, Heritage and Local Government the average cost of a new house in Dublin, a secondhand house in Dublin, a new house outside of Dublin and a secondhand house outside of Dublin in 1997 and in the latest year for which figures are available; the plans he has to ensure availability of affordable housing in view of the recent survey showing that house prices are continuing to rise; his estimate of the likely increase in house prices during 2004; and if he will make a statement on the matter. [2856/04]

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Written answers (Question to Minister for the Environment, Heritage and Local Government)

I propose to take Questions Nos. 154 and 204 together.

The unprecedented demand for housing, fuelled mainly by rapid economic growth and demographic changes, has been the major driver of house price increases in recent years. The Government's strategy is to increase housing supply to meet demand and to improve affordability, particularly for first-time buyers, and in this way to seek to bring moderation to house price increases.

The measures introduced by this Government to boost supply, such as significant investment in infrastructure, removing planning constraints, and promoting the increased residential densities, are having an effect. House completions for the first nine months of 2003 are up 18.3% on 2002, and up 16.2% in Dublin and 11.1% in the greater Dublin area on the same period in 2002. Based on those positive trends, 2003 is set to be the ninth successive year of record housing output. Ireland is building at the fastest rate in Europe — close to 15 units per 1,000 population — which is an outstanding achievement.

House price increases and their impact on affordability are a matter of continuing concern. While the rate of house price increases is still problematic, that has moderated considerably since the late 1990s, when price increases peaked at 40% per annum in 1998. To address problems associated with increases in price levels, the Government has worked to ensure the continuing enhancement of supply. Information on average prices paid for new and secondhand properties both nationally and in selected areas is set out in my Department's housing statistics bulletin, copies of which are available in the Oireachtas Library.

At the same time, the Government is concerned to ensure that the broad spectrum of housing needs is met. Almost €3.8 billion was spent in the first three years of the national development plan on social and affordable housing measures, reflecting the strong commitment of the Government to meeting needs of low-income groups and those with social and special housing needs. The housing needs of over 12,000 households will be met in 2004, compared with almost 8,500 in 1998.

The Government is committed to continuing with measures to boost the supply of housing and ensuring that the demand for housing is met in a sustainable manner. We will continue to monitor and review housing developments and policies as necessary, including examining possible measures aimed at moderating land costs for housing and other essential public infrastructure.