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House Prices.

Dáil Éireann Debate, Thursday - 30 September 2004

Thursday, 30 September 2004

Questions (32, 33)

Michael D. Higgins

Question:

29 Mr. M. Higgins asked the Minister for the Environment, Heritage and Local Government the action he intends to take arising from his Department’s annual housing statistics bulletin which showed that the price for new and second-hand houses was rising at approximately eight times the rate of inflation and that house buyers were forced to borrow €17 billion in 2003 to finance the purchase of housing; the steps he intends to take to ensure that families can have access to affordable housing; and if he will make a statement on the matter. [22567/04]

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Michael D. Higgins

Question:

45 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 respect of 1997 and the latest year for which figures are available; the plans he has to ensure availability of affordable housing in view of recent figures (details supplied) showing that house price inflation here was seventh highest of 20 countries surveyed; his estimate of the likely increase in house prices during 2004; and if he will make a statement on the matter. [22566/04]

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Written answers

I propose to take Questions Nos. 29 and 45 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 year 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. Output continues to remain high in 2004 with 35,957 units completed in the first six months of this year. 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 show 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 in keeping with demand and ensuring that the demand for housing is met in a sustainable manner, and we will continue to monitor and review housing developments and policies as necessary. 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 total amount of funding available for social and affordable housing measures in 2004 of €1.884 billion is over four times that amount provided in 1997 and represents an increase of 5.4% of the 2003 provision.

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