Mr. Mel Reynolds:

In development terms, the sales price of a unit is critical in establishing the value of land.

Any measures introduced, whether by the Department or anyone else, that increase the sale price of new housing by virtue of the normal equation used for development appraisals, increase site values. In terms of interpreting the market and interpreting policy and recent changes, both in the private and public sector, most of the measures I can think of from the development side have increased the value of sites. That is contributing towards what many of us believe to be land hoarding and site flipping. That is what we referred to in our submission, and Savills did it last year.

The basis of its statement was in an eight-page PDF document recommending people to buy shares in REITs. It is a commercial strategy at the moment and for us to accurately interpret the market we must look critically at measures that procyclically inflate new build prices, irrespective of the source. When the sale price of a new dwelling is increased by 10%, the site value increases by 35%. The windfall profits in the private sector as a result of policies that inflate sale prices are extraordinary. In terms of large-scale land holdings of €200 million and €300 million, if the Government or anybody else brings in a policy that increases the sale price of a unit by 10%, that portfolio will increase by €100 million. The people or the company that owns the land do not have to build anything. They just have to wait for things to get worse and these policies to be introduced. That is definitely a factor we are seeing currently in the private sector.