Terence Flanagan
Question:235. Deputy Terence Flanagan asked the Minister for Finance his views on a matter regarding property prices (details supplied); and if he will make a statement on the matter. [13516/14]
View answerTuesday, 25 March 2014
Questions (235)
Written answers
While it is true that we've seen a return to growth in residential property prices over the past year, it is important to remember that this pick-up follows a peak-to-trough decline of just over 50 per cent nationally over the preceding five years. Indeed, residential property prices nationally are still 47 per cent lower than at their highest level in September 2007.
While much of the attention of late has focused on the Dublin market, where prices are up about 18 per cent since bottoming out in August 2012, prices in the capital are still 50 per cent lower than at their peak in early 2007. It is against this background that the recent appreciation in house prices must be assessed.
It should also be noted that the previous housing bubble was accompanied by a dramatic increase in mortgage lending. The same cannot be said of the recent increase in house prices, with indications that a large percentage of transactions are taking the form of cash purchases. Figures from the Irish Banking Federation show the value of mortgage lending for house purchase in 2013 stood at just €2.4 billion, or just 8 per cent of the value of mortgage lending in 2006.
However, as I said in my Budget Day speech, I am aware that there are some supply limitations in certain urban areas. In light of this I introduced several measures to help increase the supply of suitable residential housing stock as part of Budget 2014. These included subject to State Aid approval the extension of the Living City Initiative, to include Cork, Galway, Kilkenny and Dublin and the broadening of eligibility criteria to include all buildings built prior to 1915
More generally, as outlined in the Medium-Term Economic Strategy, the Government will continue to work on addressing remaining challenges in the property and construction sectors. This will include developing an overall strategic approach to housing supply, identifying and implementing further improvements in the planning process to facilitate appropriate development, and seeking to improve financing options for development and mortgage provision.