Mr. Tom Parlon:

I will address some of the points made and will then ask my colleague to discuss the issue of certification and compliance costs to which Deputy Barry Cowen referred.

The availability of funds is a major problem. Chartered surveyors have suggested - I heard from their chairman recently who I am sure will give the information to the committee first hand today - there could be a cost of up to €21,000 in financing a €300,000 home. That is crazy, assuming that the builder has to borrow everything, which is probably the position in most cases. The builder goes to the bank for the figure of 60%, but he also has to seek mezzanine capital or go to somebody else. We are then talking about double digit interest figures.

We certainly believed there was a lot of hooha about the announcement by ISIF and Activate Capital that were putting together €500 million for house building. They were going to fund up to 90% of this, which sounded very good. However, when the details came out, they were initially talking about a figure of 13% or 14% which was eventually brought down to about 10%. Even after this, as one started to sell the units, there was another levy of 1.5% on top of these figures. With that particular fund, it did appear that the first priority was not to upset or undercut the banks, but funding is a major problem. We know from different contributions and seeing what is happening that the European Central Bank is attempting to almost give money away. It wants money in the economy in order that it can be spent. There was the concept of helicopter money at one stage; one received and spent it and it was going to be good. We know that if a person has money on deposit, or is lucky enough to have money on deposit, he or she will be very lucky to get any return on it. He or she may even be charged by the bank for taking care of it. We know that there is money there. The Exchequer can borrow very cheaply, at a rate of less than 1%, yet when we want to provide houses - I am speaking genuinely and on behalf of the industry - and any builder sticks his neck out and says he wants to build ten, 15 or 100 houses, it becomes very difficult. He goes to his bank and it is a major challenge to first get it to engage. If and when it does engage, it is on a 60% maximum figure and one needs to be well up to the mark to get that amount. It is then very difficult to obtain the remaining funds to provide a very important piece of critical infrastructure - housing.

We met the Governor of the Central Bank to discuss whether the fiscal rules were the issue and he said the Central Bank - even at a European level - would not be involved in lending on a speculative basis. I do not see how the provision of much needed housing infrastructure would to any degree be speculative. I know that there have been a number of proposals and hope the Government will come up with some formula to take advantage of the availability of very cheap money over a 20 to 30 year period to be invested in housing. The Society of Chartered Surveyors Ireland will go into this matter in more detail for the committee today. Currently, all of the cost of house building has to be passed on to the first-time buyer. That is the unfortunate reality. The Part V contribution required to be paid has to be added to the cost and it is the first-time buyer who pays it. In the crisis in which the country and first-time buyers find themselves it does not make sense to ask that beleaguered sector to make that contribution.

If we put the 1% across the boards, it will touch a bigger market and bring in a lot more money. I will ask Mr. Hubert Fitzpatrick to deal with this matter also.

In the context of Deputy Joan Collins's observations on the crisis that exists, we have an absolute breakdown of the costs. Hopefully, the Society of Chartered Surveyors Ireland will have such a breakdown too. We got a registered chartered surveyor to provide our figure for costs and the society can give its own independent costs. I know that, in his report, our surveyor made a point of saying he did not consult any member of the Irish Home Builders Association or the CIF in coming up with the costs. Chartered surveying is an exact science. If we take a typical house and the new standards that apply, a chartered surveyor will indicate exactly the degree of ground works to be done, the number of blocks needed, the cost of plastering, the amount of timber required, the number of roof tiles needed, all the internal stuff and so on. It is a very exact science and no one is pulling the wool over anyone's eyes. Even in terms of efficiency now and the competition that exists, unless one is a very efficient builder and able to build and deliver a house with the minimum of extras or waste, one will not feature in terms of whether an individual buyer, a local authority or anyone else is involved.

We would all love a cap on land prices. A lot of people have invested in land. A lot of the stuff has been washed out and been sold off. All the sites that were bought for €50 million are now being sold at auction for €10 million and €12 million. That is making its own readjustment. However, the cap that is on land prices at the moment is the value of the site. If someone pays €400,000 for a house in Clontarf, for example, or in south County Dublin, that is probably factoring in a site cost of perhaps €80,000 to €100,000. If trying to get a first-time buyer who has a maximum of €300,000 and who is working very hard to comply with the Central Bank guidelines to a particular market, the maximum value of a site to accommodate his or her house on is probably €30,000 or perhaps even less.

Deputy O'Sullivan raised the issue of a skills shortage. In 2006, we were building close to 90,000 houses. Last year, the number was approximately 10,000. There has been a total, over-the-cliff reaction. It is clear what happened to all of those involved in house building. Unfortunately, many did not get the chance to finish their apprenticeships, and that was a sad situation. In fairness to FAS and ourselves, at the time we worked very well together to try to assist people finish their apprenticeships. Many of those people have skills and a lot of them are gone. We are monitoring this matter very carefully but currently there is not a skills shortage. We expect, however, that if activity is ramped up, it will happen, particularly in the wet trades. Few or no plasterers, blocklayers or floor or wall tilers have come through. We have been working hard to try to get that ramped up.

We are working with SOLAS and the ETBs throughout the country. They are currently putting on courses for specialties. Form work is a big thing. This is the building of wooden cases to pour the mass concrete to build high-rise office or apartment blocks or hotels. It is very difficult to get form work contractors. Courses are being set up that will give people the basic skills so that they will be able to go on site. Dry-lining, which relates to internal partition walls and their insulation, is a particular skill in itself. One probably does not need to complete three or four years as an apprentice. An individual could pick up those skills in a ten-week course with another ten weeks on site if that person knows something about it already.

Building sites have become very sophisticated places. Guys are no longer leaning on their shovels on sites. One would be hard set to find a shovel on a site. From a health and safety regulations perspective, it is very rigorous. The last thing a builder wants on site is someone who will be a danger to himself or someone else. Being site-ready is quite a challenge for many unemployed or unskilled people. However, we are working closely with the Department of Education and Skills, SOLAS and the ETBs. In fairness to the ETBs, we are getting a very positive response. SOLAS informs me that it is providing substantial extra funding for training the individuals involved. On the Pathways to Work initiative, the Department of Social Protection has offices all over the country now and we are engaging with them in the context of their being very strong potential employers. They are interviewing people who are on the live register as well as some of our members, who are keen to take them on, and they are upskilling those individuals to make them site-ready. We are making progress. If we get an explosion in house building, we will have a problem. As we know from before, skilled people will arrive from all over the world and, hopefully, many of our citizens who emigrated and went elsewhere will choose to come back.

Ghost estates have been resolved largely, except in some of the areas where there is no local employment and so on. Considerable work has been done in that regard.

Deputy Quinlivan referred to a problem with Part V regulations. A figure of 20% of nearly nothing was very little. When house building almost stopped, little or no contribution was being made to Part V. A change has been made now to the 5% arrangement. It is still a rather difficult area. If either of the gentlemen beside me wants to tell the committee how difficult it is to manage this on site, he should feel free to do so. It is still a difficult area to manage. Building 11,000 or 12,000 still amounts to making only a minor contribution to social housing. It is passing on that cost to first-time buyers. We proposed a 1% levy across the board. That would spread the cost and raise substantially the income needed. The committee raised the issue and I heard someone refer to it. As Mr. Fitzpatrick has said, people can buy houses throughout the country at a cost substantially cheaper than the cost for us to build them at the moment. That is why there is no building. We would encourage those units to be bought up where they are available but in the areas where there are the greatest housing shortages, no houses are available to buy at those prices. Deputy Quinlivan referred to a purchase price of €75,000 in Hospital. That is probably going to be an entirely different animal from the new €175,000 house built under the new building regulations with all the bells and whistles in terms of energy efficiency and all the other aspects. We have had this debate previously. When a person is starting off and buys his or her first car, he or she does not normally aspire to a Mercedes or BMW. He or she starts off with a Ford Focus or a Volkswagen Golf. Then, if the standard of safety and so on is good, he or she works up. Perhaps we have gone a little over the top in terms of the size of house and the standards that we are setting in respect of the affordability issue.