asked the Taoiseach whether he is aware that people of moderate means are unable to purchase houses in view of the excessive prices being demanded; that the high interest rate at present being charged on loans represents a great hardship upon such people and whether the Government, in view of the fact that high interest rates and house prices are a contributing factor to the high cost of living, will take steps to impose control of house prices at a reasonable level along with control of interest rates.
Ceisteanna—Questions. Oral Answers. - Control of House Prices and Interest Rates.
As regards the high prices of houses, I would refer the Deputy to the reply I gave in this House to a similar question addressed to me by Deputy Dr. J. P. Brennan on the 4th ultimo. The Government hope that effective measures to secure a reduction in the prevailing high prices of houses will be found in conjunction with the steps that are being taken to meet the acute housing shortage. It would be extremely difficult to enforce any regulations aimed at controlling the price at which houses are sold, and, as I indicated in my reply to Deputy Brennan, a system of price control might well lead, in fact, to the creation of a black market in houses, since, under any such system, evasions of the law are bound to occur.
As regards interest rates, I am not aware that these, as such, are a great hardship on people who find it necessary to borrow money for house-purchase at the present time. Loans for house-purchase are ordinarily obtained from building societies, insurance companies or specialised agencies, and I understand that, in general, the present rate of interest charged on loans for house-purchase is 5½ per cent. in the case of building societies and 4 per cent. to 4½ per cent. in the case of insurance companies—subject, in the case of insurance companies, to certain requirements regarding the taking out of a life policy by the borrower. I do not suggest that these rates of interest are low, but they are not, in my opinion, so high as to call for special measures of control.