Thursday, 25 October 2018

Ceisteanna (112)

Bernard Durkan


112. Deputy Bernard J. Durkan asked the Minister for Finance the measures he plans to take to combat house price inflation; and if he will make a statement on the matter. [44589/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Government’s primary response to mitigating house price inflation is to increase supply. ‘Rebuilding Ireland: An Action Plan for Housing and Homelessness’, which is the primary responsibility of my colleague the Minister for Housing, Planning and Local Government, sets out a comprehensive package of actionable measures designed to address the ongoing structural constraints within the construction sector and restore the housing market to a sustainable equilibrium.

The latest data on housing activity shows continued strong growth. New Home Completions stood at 16,274 in the 4 quarters to Q2 2018 compared to 11,619 in Q2 2017, an increase of 40 per cent. Planning permission for 26,752 units was granted in the year to Q2 2018, this is an indicator of continued strong growth in home completions and is up 39 per cent on the previous year.

€1.2 billion in capital funding was allocated in Budget 2019 to support the delivery of 10,000 social homes. This included a €310 million allocation for the Serviced Sites Fund out to 2021 to increase the supply of affordable housing. The funding will allow for a discount of up to €50,000 per affordable home. The Land Development Agency (LDA), announced earlier this year, will further contribute to achieving the Government’s targets in the area of affordable housing – with a requirement that 30 per cent of all publicly owned lands developed by the LDA will be reserved for affordable housing purposes. By identifying and coordinating the development of State land the LDA will help drive increased supply and sustainable urban redevelopment.

In addition, the Central Bank of Ireland, as part of its independent mandate to preserve and protect financial stability in Ireland, introduced the macro-prudential measures for residential mortgage lending in February 2015. Although the rules do not explicitly target a reduction in home price inflation, the imposition of Loan to Income and Loan to Value limits, reduces the scope for potential price increases by limiting the amount of credit available to households.

More broadly, the actions taken to increase supply and reduce house price inflation under Rebuilding Ireland are monitored on an ongoing basis and reported publicly through quarterly progress reports.