Written Answers. - House Prices.
Ivor Callely
Ceist:
13
Mr. Callely
asked the
Minister for the Environment and Local Government
the success or otherwise of the 1998 Government action on house prices; the situation regarding house prices; the level of home ownership and availability of new housing units; the measures, being considered to assist young people purchase their first home; and if he will make a statement on the matter.
[1659/99]
Joe Higgins
Ceist:
19
Mr. Higgins (Dublin West)
asked the
Minister for the Environment and Local Government
if he will make a statement on reports of an ongoing rise in house prices in view of the measures taken in the wake of the Bacon report.
[2044/99]
I propose to take Questions Nos. 13 and 19 together.
House price returns received to date from lending institutions for the December quarter suggest a moderation in the rate of house price increases and this is supported by views from market sources and commentators.
The measures introduced in the Government's, Action on House Prices, addressed factors that were causing overheating or distortions in the market and were designed to restore a better balance between supply and demand. Measures to assist first-time buyers formed a key element of the package, including removal of fiscal incentives to investors, who had been pricing low-income buyers out of the housing market; an increase in the income limits for the local auth ority shared ownership scheme; significant reductions in stamp duty rates, particularly at lower price levels; and measures to boost housing supply, through the serviced land initiative and increased residential density.
Increasing the supply of housing remains the key element of the Government's housing policy. The measures in Action on House Prices are designed to secure a continuation of the growth in housing output and alleviate the bottlenecks or constraints on housing supply. Housing output reached a new record for the fourth successive year in 1998 at over 41,500 units, and we are actually building new houses at twice the level of 1993. The 1999 water and sewerage investment programme, launched earlier this week, is again at a record level. Over £275 million will be spent on water and sewerage infrastructural development this year and the potential for this investment to bring more residential land into service will be maximised.
Furthermore, the serviced land initiative should yield in the region of 100,000 additional housing sites over this year and next, through £44 million of Exchequer funding being spent on water, sewerage and roads infrastructure specifically to open up extra land for housing.
Increased residential density is a further key element in the Government's strategy to increase housing supply. Planning authorities have been advised to promote higher densities at appropriate locations and planning guidelines on residential density will be published shortly in draft for public consultation.
The full effect of many of these measures, particularly those designed to promote housing supply, will only be seen in the medium term. However, positive effects have already been reported by market sources, including indications of easing in house prices, investors no longer squeezing first-time buyers out of the starter home market, and increase in the number of second-hand houses coming on the market, as a result of stamp duty reductions.
Ongoing implementation of the Government's strategy and monitoring of its effects remains a priority for my Department to ensure that all of the measures produce beneficial results as soon as possible.
