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House Prices.

Dáil Éireann Debate, Thursday - 29 April 2004

Thursday, 29 April 2004

Questions (12, 13, 14, 15)

Seán Crowe

Question:

12 Mr. Crowe asked the Minister for the Environment, Heritage and Local Government the measures that are being planned by the Government to tackle ongoing house price increases; and if he will make a statement on the matter. [12266/04]

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Michael D. Higgins

Question:

19 Mr. M. Higgins asked the Minister for the Environment, Heritage and Local Government the average cost of a new house in Dublin, a second-hand house in Dublin; a new house outside of Dublin and a second-hand house outside of Dublin in 1997, the latest year for which figures are available; the plans he has to ensure availability of affordable housing, in view of the recent surveys 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. [12195/04]

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Martin Ferris

Question:

30 Mr. Ferris asked the Minister for the Environment, Heritage and Local Government the percentage increase in house prices from 1997 to date; if he is concerned regarding the impact of these increases on the ability of persons within this State to secure housing; and if he will make a statement on the matter. [12311/04]

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Caoimhghín Ó Caoláin

Question:

48 Caoimhghín Ó Caoláin asked the Minister for the Environment, Heritage and Local Government his views on the increasing fear regarding the development of a bubble or over valuation in the housing market in this State. [12308/04]

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Written answers

I propose to take Questions Nos. 12, 19, 30 and 48 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, including significant investment in infrastructure, improving planning capacity and promoting increased residential densities, are having effect. The years 2003 was the ninth record year for house completions, with 68,819 units completed, an increase in output of 19.3% on 2002 and an increase of 10.5% in output in the greater Dublin area during the same period. Ireland is building at the fastest rate in Europe — 17 houses per 1,000 population — which is an outstanding achievement.

While the rate of house price increases is still problematic, this has moderated considerably since the late 1990s when price increases peaked at 40% per annum in 1998. Detailed information on house prices are set out in my Department's housing statistics bulletin, copies of which are available in the Oireachtas Library. A number of market commentators, including the Central Bank, are now predicting greater balance in the housing market over the next few years, as increased supply has a restraining effect on house prices. Indicative data available to the Department shows that first time buyers continue to have a significant presence in the housing market.

The Government will continue to focus on measures to maintain a high level of housing supply. The investment in the servicing of land has led to a strong stock of land available for residential development. At the same time, the Government is concerned to ensure that the broad spectrum of housing needs is met. Almost €5.17 billion has been spent in the first four years of the national development plan on social and affordable housing measures, over 7% ahead of the forecast for that period, reflecting the strong commitment of the Government to continue to meet the needs of low income groups and those with social and special housing needs. The housing needs of over 13,600 households were met in 2003 compared to almost 8,500 in 1998, which is the highest level of housing provision under the full range of social and affordable housing measures for over 15 years.

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. It will continue to monitor and review housing developments and policies as necessary.

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