Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

The problem with all this is it is predicated on the idea that if one increases supply it will help resolve the crisis. If we increase supply but the supply is unaffordable it will not resolve the crisis it will make the crisis worse. That is the basic point I put to the Minister of State and he did not really answer it. We had supply at a very high level before the crash but it was unaffordable supply. At a certain point it became clear that the people who borrowed the money could not pay it back because there was no market for that number of unaffordable properties. Yet we are going to do it again. The banks are saying "We are not doing that again" because they can see where it is heading and they see where it headed last time but the Government is going to step in and do what the banks will not do to repeat the mistakes of the past. I do not see why the Government would do it. It is crazy to do it.

Mel Reynolds in particular has been arguing very strongly that housing output will start to decline and will not gradually increase as the Government believes. Developers and builders know that because they know there is not a market for large-scale housing at current prices. However, they have to sell at current prices to recover their costs. They will, therefore, sit on developments or drip-feed housing to keep prices high. It is now proposed to facilitate more of that through House Building Finance Ireland, HBFI. This will not solve the problem we are trying to solve, namely, the housing and homelessness emergency where large numbers of people are locked out of the market because of unaffordable prices. It will also contribute to doing what we did prior to 2008.

I am not the only one highlighting overheating in the housing market. The Irish Fiscal Advisory Council, IFAC, has also highlighted the issue. It is driving up the cost of accommodation to unsustainable levels with all the dangers that creates for the economy. The Minister of State has said nothing that answers that fundamental question. Does he believe that simply by increasing supply, house prices will come down at some point? If he does, he is living in cloud cuckoo land. The evidence shows clearly that as housing supply increased, so too did house prices. They did not go the other way.