House Prices.

Dáil Éireann Debate, Tuesday - 27 April 2004

Tuesday, 27 April 2004

Questions (229)

John Bruton

Question:

288 Mr. J. Bruton asked the Minister for Finance if he has asked his services to analyse the methodology and evidence in the reports, UK House Prices: A Critical Assessment, and The UK Housing Market: Bubbles and Buyers, which show a high risk of a housing price bubble in Britain; the similarities and dissimilarities of the content of these reports to the Irish housing market situation; and if he will make a statement on the matter and on evasive action that can be taken to mitigate the risks involved. [12029/04]

Written answers

Minister for Finance (Mr. McCreevy)

I am aware of views expressed by different commentators in this area but the evidence of well-supported demand and continued strong supply would seem to suggest the prospect of an orderly price evolution in the housing market. I noted the April 2004 comprehensive analysis of the housing market by AIB, The Irish Housing Market, that concluded:

Housing supply is at very high levels. However, the market is well underpinned on the demand side, not only by demographic factors but also by investor demand, the strength of demand for second homes and by the level of unsatisfied pent-up demand. Thus, prices are unlikely to crash and the risk of negative equity on any meaningful or material scale is small.

I also noted that the UK Chancellor of the Exchequer is reported as having disputed various negative assessments of the UK housing market.