Written Answers. - House Prices.
Minister for the Environment and Local Government
his views on the evidence given to the Joint Committee on the Environment and Local Government by a person (details supplied) that house prices in Dublin, already among the highest in Europe, are likely to increase by a further 20% in 2000; the steps, if any, he will take to ensure affordable accommodation for people in Dublin; and if he will make a statement on the matter.
The ESRI is one of a range of economic commentators which forecast house prices and its forecasts appear to be towards the upper end of the scale. Most other economic commentators, including Davy Stockbrokers, Irish Permanent, and most recently, AIB Group Treasury, agree that a welcome element of moderation has come into the market, and that, as the number of new houses coming on stream continues to increase this year, they expect to see the level of price growth continuing to moderate. For example, the latest AIB quarterly economic commentary has forecast that national house price increases will continue to moderate with expected growth of 15% this year and 10% in 2001.
While my Department does not publish projections of future house price levels, there is strong evidence that the range of measures being taken by the Government to remove overheating in the housing market and accelerate housing supply are bringing about significant moderation in house price increases. Figures for the final quarter of 1999 indicate average annual house price increases of approximately 16% for new houses and 18% for second-hand houses on a national basis – well below the peak rates of increase, 26% and 37%, recorded in mid-1998. Annual rates of increase in Dublin for new and second-hand house prices, around 22%, are also well below the peaks of 37% and 42% reached in 1998. Moreover, indications of price trends in the early part of the year are also positive, with the Irish Permanent house price index and my Department's provisional monthly prices both showing further slowdowns.
The Government strategy to moderate house price increases is based on increasing the supply of housing. The Government has implemented a comprehensive range of initiatives to this end, and these measures are having effect. Through the serviced land initiative and revised development plans and density guidelines, we have increased both the supply of housing land and the output which we can get from it.
Output in Dublin city and county is particularly encouraging, surpassing 10,000 completions for the first time ever in 1999, and leading indicators for future development are positive, with Dublin HomeBond new house registrations up 36% in the first quarter of 2000.
A strategic housing response team was established last year by the four Dublin local authorities to co-ordinate efforts to remove bottlenecks and expedite housing developments in the Dublin area. My Department's housing supply unit is liaising closely with the team to drive and effectively deliver on the range of measures to maximise housing output, where demand is greatest, and to remove supply and planning bottlenecks.
Initiatives to provide affordable housing include the local authority affordable housing scheme launched in March 1999, and the shared ownership scheme. I have issued draft guidelines for implementing the housing supply provisions of Part V of the Planning and Development Bill for full consultation and local authorities have been asked to commence work on preparation of housing strategies to ensure that the housing needs of all sectors of community are fully taken account of in development plans.