Professor John McHale:

That is not something we looked at in particular. The Deputy's analysis sounds right in that it is a supply constraint problem. In addition to the factors listed by Dr. Donal Donovan on diagnosing a bubble, it is when people are buying because they are extrapolating recent price increases to continue indefinitely. If we see evidence of that, particularly if it is underpinned by strong credit growth, that is worrisome but I do not get the sense that the particular dynamic has not begun yet. The Deputy is correct that the construction industry is operating at a reduced level and house building is way below historic norms. Professor Alan Barrett has a better sense of the figures. An overly expanded construction sector did damage in the past but we are very far away from it now. It would be welcome to see the supply response, which need not come only from the private sector and could involve public investment. We see low levels of investment, not just capital expenditure by the private sector but also by the public sector. There is scope for both. At this point in time, a strong supply response coming from the construction sector would be welcome.