Mr. Patrick Davitt:

I will make a short statement of five or six minutes' duration, after which the president of the Institute of Professional Auctioneers and Valuers, IPAV, Mr. Eamon O'Flaherty, will make a brief contribution. We want to leave as much time as possible for questions on our full submission.

IPAV is delighted to take up the invitation to appear before this committee. We hope that, through our submission, we can help in some way with members' work in tackling a difficult, complex problem. I congratulate them on their work to date and I acknowledge the urgency that the new Dáil has given to this matter even before the formation of a Government. The issues of housing and homelessness are complex and inter-related. The housing crisis displays to a dramatic degree how each cohort of society is interdependent. A policy change impacting one group has a downstream effect on another. The committee's work could be a landmark in mapping the way forward.

The IPAV was founded in 1971 and now represents 1,000 members across all 32 counties. Our main aim is to represent our members through education and other means, including by contributing to important debates such as this one by drawing on our vast knowledge and experience on the ground. The IPAV's proposals to the committee are outlined in our submission, which I expect all of the members have. I will highlight some of the key proposals in the short time available to me.

In a market that is functioning normally, one should be able to rent, buy or sell a home. In the current market, choice is diminishing and social change is being foisted upon us. This kind of social change is impacting most severely on younger age groups and those with few resources, but it also hurts the economy. This is happening at a time when there are more than 300 vacant sites in our city, some 150 acres of land that should, and could, be brought into production without delay. Housing policy is so critical to the social and economic well-being of any society, in particular one such as Ireland's that has suffered the severe effects of the financial collapse, that it needs a whole-of-government approach. In this regard, the IPAV strongly encourages the new Government to appoint a full Cabinet Minister with responsibility for the sector. He or she should be supported by a Cabinet sub-committee on housing and planning, which could bring together all of the relevant Departments. The IPAV recommends the setting up of a consultative property council comprising all stakeholders, with varying and divergent views, so as to advise the new Minister. This process should be all-inclusive and rapid, with the Government arriving at a plan for long-term sustainability in the housing market that contains short, medium and long-term goals. The IPAV is prepared to play its part in such a council.

As a representative body for auctioneers and estate agents, the IPAV is keenly aware of the abnormally low numbers of transactions in the housing market. There were 43,428 residential transactions in 2015, including multiple sales, equating to a national turnover of 2.2%, which is considerably below the 4% to 5% that could be considered normal. Despite population projections, new builds in 2016 are on course to fall far short of the 20,000 units and are projected to be more in the order of 13,000. A large proportion of these new builds will be one-off housing in the country, not in the cities where demand is greatest. Ten years ago, new builds were at 93,000 units, which we were led to believe was the amount required. This points to the industry's capability to build 20,000 units per annum.

There are a number of reasons for there being so few new builds. These need to be tackled urgently. There is widespread acceptance that the cost of building is a major impediment to new house construction. The lack of availability of building finance at reasonable interest rates is a particular impediment to house building. The new Government needs to incentivise small and large builders by making building finance available at interest rates of between 1% and 3%. We propose that the Department of the Environment, Community and Local Government be empowered to offer finance to builders who wish to participate in an agreed price building scheme, which would be made available through a separate building fund. The IPAV believes that this new development contribution rebate scheme, which is intended to boost house construction in 2016 and 2017 by returning an 80% to 100% rebate on development levies paid, needs a number of amendments, including an extension to all cities and to all builders who want to take part in the agreed price building scheme.

We believe small builders, the mainstay of Irish construction, are not receiving equal treatment to their larger counterparts. It is estimated that the current rate of VAT at 13.5% adds an extra €15,000 to €17,000 to the price of a new property and a reduction to 9% would further incentivise building. Such a VAT reduction has already proven itself in the tourism sector and could deliver a saving of €7,000 per house.

The Institute of Professional Auctioneers and Valuers, IPAV, believes that while the mortgage lending restrictions introduced by the Central Bank in 2015 were well intended and, in principle, are important for long-term economic stability, they are excessive in some respects. They are disproportionately impacting first-time buyers in urban areas, especially in the capital city. We believe the loan-to-income ratio for first-time buyers should be increased from 3.5 to 4, or possibly 4.5. We were led to believe when these were introduced in February 2015 that the new measures were not designed to steer or limit house prices but rather to restrict lending. We welcome the statement from the Governor of the Central Bank this week that from June 2016, he intends to seek submissions on the macro-prudential policy before a final review. I will now hand over to our president, Mr. Eamon O'Flaherty, who will speak about rural regeneration.