Mr. Bernard Byrne:

This is one of the key topics going forward. There are many statistics on the number of new builds floating around but let me use general numbers to demonstrate momentum. I am sure most people would agree that 30,000 units per annum is required to have a clearing level of stock. There will probably be about 20,000 units this year. Again, we can argue about the numbers but we are well short.

The number of units are being built is growing annually. We will get to between 23,000 and 25,000 units next year and beyond. That will still cause a huge pent-up demand to exist because we have had a supply imbalance for a long period. I do not know the exact number but more than 50,000 units would be a reasonable estimate of pent-up demand.

Most people agree that the pricing issues that are evidenced in the market are far more driven by the supply-demand imbalance than by any other issue at this point in time and will not be resolved by any mechanism other than supply ultimately getting ahead of demand. We are probably two to three years away from that. That is a guess. Then it will have to overshoot annual demand to meet the pent-up position.

The macroprudential rules, which we understand, are acting as a brake at this point in time. That is appropriate because way too many properties are being sought versus the supply, so the only thing that happens is the price goes up, which is not helpful to anyone. To the extent that the macroprudential rules are there and act as a dampener on this at this point in time, that is an understandable and good thing. It creates capacity later on if supply tips over and exceeds demand, and pricing should come down. Ultimately, there is still a stock of affordability that can be brought on but the measure should not be price changing all the time for it so we are supportive of the macroprudential rules being a useful mechanism to effectively prevent too much demand coming in - there is still excess demand - but even more demand coming in.