Dáil Éireann - Volume 616 - 08 March, 2006

Written Answers. - House Prices.

  45. Mr. McCormack asked the Minister for the Environment, Heritage and Local Government his views on the recent ESRI-Permanent TSB house price index which showed the average house price for a first-time buyer had exceeded €250,000 for the first time; and if he will make a statement on the matter. [9489/06]

  91. Mr. Durkan asked the Minister for the Environment, Heritage and Local Government if he has examined the contributory factors to the continuous increase in house prices; his plans to address the issue; and if he will make a statement on the matter. [9516/06]

  Mr. N. Ahern: I propose to take Questions Nos. 45 and 91 together.

[658] I am aware that the Permanent TSB-ESRI index of house prices showed an overall average figure of €281,197 in January 2006, with an average first-time buyer figure €30,000 lower. It would not be appropriate for me to comment on the Permanent TSB index, which is based on its own lending data. The very large increase in housing output that has been achieved including a new record of almost 81,000 completions in 2005 — almost two and a half times the 1996 level — has had a restraining effect on house price increases in the face of very strong demand pressures and increased mortgage lending.

Our strong economic performance has impacted significantly on housing demand in 2005 and 2006, particularly through substantial increase in employment of around 90,000 and immigration at around 70,000 in 2005. Demand can, potentially, be further fuelled by additional factors such as excessive lending. There are indications that the extent of demand pressures has had an adverse effect on the trend of house price moderation, particularly in the later part of 2005.

My Department will continue to liaise with relevant agencies such as the Department of Finance and the Central Bank in relation to housing market developments generally. The Government will continue to promote moderation in house prices through effective policies, including measures to ensure adequate overall housing supply in keeping with demand in the context of balanced and sustainable growth of the housing market and to maximise availability of affordable housing.

Question No. 46 answered with Question No. 11.

Question No. 47 answered with Question No. 8.