Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I was referring to the exemption from capital gains tax for seven years for people who buy commercial property in Ireland. That brought an awful lot of investment money into Dublin. There was a major overhang of property in Dublin, which was under-used and not put to productive purposes. There was not a cohort of people in Ireland with the resources to invest in it, even though the same rules applied to Irish people if they had the resources to invest. A lot of foreign money came in. It put resources that were under-used or not used back to use, which is very important in terms of office blocks. The IDA tells me it is running out of the kinds of office block it needs in Dublin for some of the advanced industries. Most of the investors paid the purchase price and brought in funds to upgrade the properties, enhance their value and refurbish apartments. We can see the signs of it around town. I have no interest in driving it above the overhang and I have said I will not renew that particular tax incentive beyond the end of 2014. It worked while it worked. It did the job. Of all the sectors, the building, development and housing sector was the most damaged and became the second scapegoat sector. Banking and building were the two scapegoat sectors in Ireland - many people would say justifiably so. Every modern economy has a dynamic building and development sector.

If we want houses to be built we need builders who can at least get a margin on the construction cost. The property market is coming back to that point again. In parts of Dublin there is now a good margin whereas in other parts of Dublin it is not quite at that point.

On the rental side, it is true that rents have been increasing in Dublin recently, and that is why we need greater supply, but they have increased by 6% or 7% having fallen 25% between 2008 and 2012. They have increased a little but if we consider where they fell from we are still not into a proper market. Housing in Dublin is 50% below the peak, therefore, there are not big cohorts of people rushing in to make big money on it at present, although it is beginning.

On both the private housing and the social housing side the model was broken, and we need to build it again from the bottom. That is starting now, and we will build it. NAMA has promised me that it has building land and resources to put over 4,000 social houses into Dublin, principally through the housing agencies, and it will do that. It has also offered many houses to local authorities but many local authorities will not accept them because they have their own internal rules about the percentage of social houses that can be in any estate. Usually, there is a 20% rule in local authorities. If the cohort of houses it offers is 50% of the estate, the local authority will only accept 20%. In the housing emergency we are in I believe the new councils should examine those issues and try to remove the restrictions, even if they are only removed temporarily.

I fully agree with the Deputy that there is a big problem with construction and development. It is beginning to move again but there is a massive social need and while we curse the builders, if they do not build the social need will not be met. We have to move on with it.