Dr. Kieran McQuinn:

On the housing side of things, as the committee is probably aware, there has been quite a lot of discussion about the accuracy or otherwise of the housing supply figures released by the Department of Housing, Planning and Local Government. They are now officially called the connections to the ESB. The Central Statistics Office, CSO, has done quite a lot of work on looking into the figures and coming up with alternative sets of figures to reflect more accurately the current degree of activity. My understanding is that the CSO will publish figures fairly soon as to the actual level of supply in the market or the level of activity in a given year. Part of the problem is that there were more than likely close to 25,000 or 20,000 housing units built last year. The issue is when these houses were actually built. Were they half-built in 2007 and then finished last year etc.? I think there will be greater clarity on this from the CSO fairly soon. What we are looking at is the trend in respect of the level of activity, and one can clearly see there is an upward trend. Perhaps the level is off in respect of the figures we are talking about but the trend is clearly upwards.

The second question the Deputy asked, if I understood it, concerned the implications in terms of capital expenditure and for the capital plan if we radically increase housing supply figures in the economy. There was an earlier question in the previous session about when we will know that the housing market is beginning to unduly influence the level of economic activity. The answer is when one sees housing supply levels significantly in excess of the structural demand estimates, which at present are in the region of 30,000 to 35,000 units. If we go back to building double that, as we were doing back in 2005 to 2008 - I think on average we were building 85,000 units per annum over those three years - we will know that the housing market is beginning to unduly influence the level of economic activity. Clearly, that is one metric that would show that things are getting out of control. Regarding the overall capital expenditure, obviously, the vast majority of those housing units will be privately built, so I am not so sure what the implications will be purely on the capital budget but it is again a matter of the extent to which the overall activity levels would start to unduly influence activity in the economy.