Dáil Éireann Debate, Tuesday - 22 February 2022
281. Deputy Bernard J. Durkan asked the Minister for Finance if he accepts that the going price for newly built houses becomes the base line for determining the next phase of development thereby carrying and contributing to house cost inflation; and if he will make a statement on the matter. [10036/22]
View answer282. Deputy Bernard J. Durkan asked the Minister for Finance the deterrents that might be introduced to prevent the situation by which a newly built house when placed on the market predetermines the inflated price of the next phase of any development; if he has a proposal to combat such inflation; and if he will make a statement on the matter. [10037/22]
View answerI propose to take Questions Nos. 281 and 282 together.
My Department continues to monitor all aspects of the property market, including the rate of property price inflation, on an ongoing basis. According to the most recent figures released by the Central Statistics Office, the national Residential Property Price Index increased by 14.4 per cent in the year to December 2021. The price of new homes also increased by 5.1 per cent between Q4 2020 and Q4 2021.
The "going price" of a house is determined by the cost of construction and the dynamics of housing demand and supply. The high levels of property price inflation seen recently are likely a reflection of an undersupply of homes in the market and the release of savings built up during public health restrictions.
The Government’s primary response to mitigating residential price inflation is to increase supply. Recent data give encouragement that the target for delivery of new homes for 2022 under Housing for All will be met and very likely exceeded. During 2021, over 30,700 new homes were commenced, the highest since 2008. In addition, planning permission was granted for the construction of 39,077 new units in the 12 months to end-September 2021.
In addition to increasing the supply of homes in general, more work needs to be done to increase the supply of social and affordable homes. In Budget 2022, €4 billion was allocated towards housing, including capital funding of €2.58 billion, a large element of which will be used to deliver 9,200 new social homes. The vast bulk of this will be delivered through new-build, with a limited, targeted acquisition programme.
Housing for All also targets the delivery of 54,000 affordable homes for purchase or rent and over 90,000 social homes by 2030, which will make a real difference in improving affordability for our citizens.
In Budget 2022, I also extended the Help to Buy scheme which is a key support for first-time buyers who wish to purchase a new home.
All of these measures testify to the need to take a multi-faceted approach to increase the supply of new housing and I will continue to work closely with my Government colleagues to ensure these targets are delivered.
