Kieran O'Donnell (Fine Gael) | Oireachtas source

One of my concerns is that the mainstream banks are effectively, for want of another term, leaving the building of housing units to the funds. That is unhealthy. I would like to see the banks getting more involved. Bank of Ireland's funding of 3,000 units today is not good enough.

Ms McDonagh referred to how house prices were well off the peak, but when they peaked, they were way above what they should have been. That is why we got into this mess. The only path that will resolve this issue sustainably is to increase supply. I urge the banks in this regard. They are looking to heal their own balance sheets, which is fine, but they must play a part in increasing the number of residential units that are available to first-time buyers. If those units come on stream, it will dampen house prices further.

Ms McDonagh stated that prices were well below peak, but peak was when the top came off the chimney and the whole thing imploded. Does she regard current house prices as being reasonable value? What will be their rate of inflation in the coming years? At what level does that become unsustainable? The Governor of the Central Bank appeared before us recently. He expected inflation to be 5% per annum for the next three years. Anything above that and we would be entering dangerous territory. At least, that is what I understood him to mean. I want to know Ms McDonagh's perspective on this overall matter.