Mr. Tom Parlon:

Deputy Byrne raised a number of issues regarding small sites. I look out for sites while I cycle and walk around the city. I see sites that have been idle for a long time, and are now being sold off. There are now fewer costs involved in developing a site because the chances are that water and sewerage networks are connected and street lighting has been installed. Such sites lend themselves to development.

The Deputy also referred to first time buyers who bought expensive houses. The figures show that the number of people in negative equity are on the decline, something of which I have personal experience. Price increases are one factor. I understand they have now stabilised fairly well. All of the indications are that interest rates, which are another factor, will remain very low. There is now pressure on banks to reduce mortgage rates and so on, something I hope the new Government will deal with. I hope there is some light at the end of the tunnel for those affected.

Deputy Ryan referred to Part V and asked whether people do not want social housing in a development.

From reading some of the transcripts of previous meetings, I know that the committee has had lively discussion about that before. Whether it is people objecting or people not wanting to buy, it is an issue. We provide the product and we put it up there. As far as we are concerned, we do not have any prejudice in that area. If the Government says that we must do X, Y or Z, we do it. It may have implications otherwise.

What previously applied to social housing is not the case anymore because nearly 90% of the people who are now on housing lists are individuals who do not comply with the Central Bank's mortgage regulations. It has no other stigma attached to it anymore. It is simply that people can ill afford to buy. This is an issue that will become more apparent. The industry and the builders do not have any issue. It is a purely economic point we are making. I know there is opposition to it. I would expect that if there was a 1% levy, it would be entirely ring-fenced and would go directly into housing, rather than anywhere else. There were many local authority levies collected in the past that disappeared into other obligations that the local authorities had.

One question that arises all the time relates to the fact that if the VAT is reduced, what guarantee is there that it will be reflected in the price of houses? That is a tricky one. One of my colleagues has already said that if the VAT were to change in the next while, it would be reflected in the prices that people have offered to pay and in their mortgage deposits. There was a VAT change in the hospitality sector. I have heard the Minister for Finance say several times that if he sees the prices of hotel rooms or meals rising, he will have a rethink in this regard. In terms of the taxes coming in, the large amount of people involved and the fact that every hotel room is being filled with a shortage of them around the country now, my understanding is that the Exchequer return has given a major boost to the industry. I hope that model will be looked at in terms of what applies to the housing industry.

The industry needs a profit margin. If one does one's figures now to build 100 houses, gets a chartered surveyor to do the costings and factors in the VAT at 13.5%, saving a bit on the levies would make a difference. The Society of Chartered Surveyors Ireland suggested that if there was a €6,000 local authority levy across the country, it would save €7,000 or €8,000. If the financing costs were halved, it could save €10,000 or €12,000. If the VAT was reduced to 9%, it would save close to €12,000 as well. Taken together, these would add up to nearly €30,000 in savings. If that €30,000 means that the bank says, "Go ahead, build those 100 houses", one still has to take a chance on building.

The other thing is that there is no speculative building of 100 houses. These two gentlemen beside me might rap my knuckles when we leave, but if they had planning permission for 100 houses, the chances are that they would build a showhouse or two to show off the style of houses and then they would build a few more. They would get on to their agent and he would receive people. Somebody told me recently that approximately 1,100 people came to look at some houses but that only 70 deposits being put down in respect of these. There are an awful lot of lookers and people who aspire to buying a house or who are in need of a house but, for one reason or another - be it inability to comply or whatever - they are unable to do so. The chances are that one would build a showhouse, show it and somebody would come along. As soon as one has a deposit and a contract signed, one will build on and on. The bank would certainly not allow one to build an extra ten houses over and above what one has until the contracts are signed. That is probably not such a bad idea, but we need to speed up the process. If we intend to build on a large scale, it needs to be sped up in a big way. A reduction in VAT would certainly give an incentive to provide the stock. I understand the VAT reduction in the hospitality sector was introduced for a year and then rolled over. We would suggest that such a VAT reduction in the housing industry be on a similar time limit. If there is evidence that the savings are not being passed on in the price of houses, then it is up to the Minister for Finance to change that.

Deputy Butler raised the issue of over-reliance on local authorities. Unfortunately, those authorities did not build many houses for a long time and are still not doing so now. We would support local authorities becoming involved in direct build projects. In terms of joint venturing, they would get very good value if they came up with designs and put them out to tender. They would get good value from the private building sector, who would provide those houses. There are people in the industry who have the required skills and capacity to do so.

I appreciate exactly what the Deputy is saying about this committee examining the national picture. We are a national organisation. We recently brought our roadshow around the country.

One needs to be very careful about how one describes the recovery in the industry because it is not being felt down in Tullamore, Sligo or Waterford. It is lucky that there is a motorway from Waterford to Dublin because a lot of builders from Waterford and elsewhere come to Dublin to seek work on a daily basis. One certainly would not be able to build a house for €240,000 in Waterford until the stock referred to is used up. If there is a social need, the various housing authorities and housing agencies should take advantage of it.