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

I have been around for a good while and I have been looking for a self-financing tax break for years but I have not yet found one. While I agree with the Chairman that the gross cost might not be the gross figure, there is no self-financing tax break that I know of. There is always a cost to the Exchequer for any tax break. People looking for tax breaks always say, "This will pay for itself", as the opening position. We will give the committee the best data possible when it is assessing this but tax breaks are not self-financing; there is always a cost. We hope output will increase.

I refer to how to model this to bring the price of houses down. One of the fundamental problems over the past few years is that the replacement cost of a house for a builder was below the market price. Who would build if the house next door was available cheaper second hand? Now those pressures have increased and there is a supply shortage. There is a demand driver again and I understand that the replacement cost of a house and the purchase price of a new house are close enough at this stage. There is evidence of that on the market. In Dublin, since Christmas - do not pin me to the accuracy of this number, which is a ballpark one - approximately 80 new sites have opened up for residential homes. Some have 15 houses while more have 80 houses. A number of the larger developments are at planning stage. The largest property developer in the world out of Texas, Hines, has bought Cherrywood where there is potential for approximately 4,800 units. The company has a different model again under which it sub-lets to small builders and so on. Cairn Homes bought the Ulster Bank land bank stretching from west Dublin to Portmarnock as well as other sites scattered across the country. The land bank is mostly in Dublin. The advantage with the big players is they can raise money on the market and, therefore, they do not get into the same trap as the small builder of having to pay 14% for an equity stake. They can raise money at 2%. The market is correcting itself but it needs interventions as well in order that it corrects itself more rapidly. There is a range of other issues such as regulation, planning, bureaucratic delays and finance. However, the market is correcting but too slowly from our point of view and, I am sure, from the committee's point of view as well.