Mr. Bernard Byrne:

Other things being equal - and other things are not equal because a set of other initiatives are taking place on the construction cost side that may have some impacts - one of the comments that would have come from the construction and property sectors was that pricing was too low to justify the development of new builds. There is an element of the pricing for first-time buyers, other things being equal, having to rise to attract supply into the market. There will be two factors playing out and it will be difficult in the first six to 12 months to figure out which of them is happening. One will be a move to a clearing price in terms of first-time properties and the second might well be price inflation as a result of a supply-demand imbalance still in the system. In the short term one is likely to see prices rising. Some of that is necessary to encourage supply to come forward and some of it will be simply a consequence of that shortage of supply for demand. As a measure, it will encourage the development of first-time properties in a significant way. That is something we will see playing out. Property developers, and banks, will now be able to look at the market and see how properties can be moved into a consumer marketplace as consumers can get the deposit together, so they can construct. The measure is likely to have a positive impact from that point of view.

The other positive measure in the Central Bank announcement yesterday is that it is clear from the Governor, Mr. Lane's speech and the actions of the Central Bank that the Central Bank will keep this under very close review. There will be short-term and medium-term effects and then long-term effects.