Thursday, 4 November 2004

Questions (103, 104)

Aengus Ó Snodaigh

Question:

89 Aengus Ó Snodaigh asked the Minister for the Environment, Heritage and Local Government if, in view of the ongoing and endemic housing difficulties being experienced by persons across the State, he has plans to bring forward a national housing strategy to address all aspects of the housing crisis; and if he will make a statement on the matter. [27395/04]

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Ruairí Quinn

Question:

109 Mr. Quinn asked the Minister for the Environment, Heritage and Local Government if his attention has been drawn to a survey (details supplied) showing that house prices for first-time buyer’s are rising by almost €2,000 per month around the country, and by almost €3,000 per month in Dublin; if he has plans to implement a new strategy to reduce the spiralling costs of house prices here; and if he will make a statement on the matter. [27339/04]

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

I propose to take Questions Nos. 89 and 109 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. Output continues to remain high in 2004 with 47,645 units completed in the first eight months of this year, up 15% on 2003 levels. The rate of house construction in Ireland, namely, 17 houses per 1,000 population, is among the highest rates being achieved in Europe.

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. 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.

In addition to measures to support a market response to the unprecedented demand, the Government has placed a particular emphasis on the delivery of targeted schemes of affordable housing. Output has increased under the shared ownership and the 1999 affordable housing scheme which are targeted at purchasers with low and modest incomes. Over the coming years, the availability of affordable housing options will be further expanded with units coming on stream through Part V of the Planning and Development Act and the affordable housing initiative. In addition to the units already acquired to date under Part V, 1,600 affordable units were planned or in progress at the end of June, indicating the increased momentum of delivery of this initiative. At the same time, the Government is concerned to ensure that the broad spectrum of housing needs is met.

The total amount of funding available for social and affordable housing measures in 2004 is €1.884 billion. This is over four times the amount provided in 1997 and an increase of 5.4% on the 2003 provision, 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. It is anticipated that the needs of over 13,000 households will be met through these measures in 2004, compared to almost 8,500 in 1998.

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.