Mr. Tom Parlon:

Clearly a project has to be viable, whether it is a single house, a development of houses, or a block of apartments. It has to be viable and it has to be financed. We know that interest rates are increasing. We know that the model there previously for investors does not appear to be as attractive to them now. Some of them are pausing and waiting to see what is going to happen. I made the point that first-time buyers have a limited amount of money and can only borrow so much.

Firs time buyers have a limited amount of money. The can only borrow so much. I know the Central Bank introduced some extra flexibilitu lately. They are minor enough but they give a little bit of extra but there is still very little scope for first time buyers to add on the extra cost. It is a bit like the last straw that broke the camel's back. When the Minister for Finance, Deputy Pascal Donohue, was opening his budget speech he said that he was very conscious not to add to the difficulty of cost increases by the spending of his €11 billion. The only place I can see where he has added to the cost is very clear. We can measure it and it has been measured professionally by the Institute of Chartered Surveyors and it is in the cost of housing and building. Not in 40 years have we had such unprecedented cost increases. For the Government to add to that, for whatever reason, just does not make any sense. One of the things that keeps jumping out at me is that when you are looking at the cost of housing the soft costs amount to just 52%. The hard costs, the bricks and the mortar and the work that the builder who we represent is less than half the total cost of the house. Obviously, the site has to be bought. I was just looking at a planning application in the west of Ireland. The local authority contribution was €10,880, the waste water connection for a single house was €3499 and the water connection was €1840. That is €16147 that has to be paid when a planning application is made. The costs are crazy and to add on extra costs and I know lots of people are saying that the industry should make a contribution as if the industry was one big conglomerate. The industry, if one takes all of the people that are involved are making a massive contribution to the exchequer, there is no question about that. Even the fact that Ireland is the only jurisdiction in Europe that has any VAT on housing. VAT of 13.5% on a regular three bed house that the Chartered Surveryors are talking about is around €40,000 that goes directly to the exchequer.

The Central Bank introduced some extra flexibility, although minor enough, lately. This gives a little bit extra but there is still very little scope for first-time buyers to add on the extra costs. It is a bit like the last straw that broke the camel's back. When the Minister for Finance, Deputy Pascal Donohoe, was making his budget speech he said he was very conscious not to add to the difficulty of cost increases by the spending of his €11 billion. The only place I can see where he has added to the cost is in the cost of housing and building. This has been measured by the Society of Chartered Surveyors Ireland, SCSI.

Not in 40 years of construction have we had the level of cost increases that we have seen recently. For the Government, for whatever reason, to add to that just does not make any sense. One thing kept jumping out at me, and I was delighted the Society of Chartered Surveyors Ireland mentioned it. When one looks at the cost of housing, the soft costs amount to 52% while the hard costs, the bricks and mortar and the work that the builder has to do, are less than half the total cost of the house. Obviously, the site has to be bought. I recently looked at a planning application in the west of Ireland where the local authority contribution was €10,800, the wastewater connection for a single house was €3,499 and the water connection was €1,848. That is €16,147 which has to be paid when the planning application is made. The costs are crazy and to add on extra costs makes no sense. Many people are saying the industry should make a contribution, as if the industry was one big conglomerate. The industry, if one takes all of the people involved, is making a massive contribution to the Exchequer. There is no question about that. We are the only jurisdiction in Europe that has any VAT on housing. VAT of 13.5% on a regular three bedroom house, which SCSI mentioned, is approximately €40,000. That money goes directly to the Exchequer. All the costs mentioned keep going up and viability is severely challenged, whether it be €1,000, €1,500 or €3,000 extra.