Ms Marian Finnegan:

I will also comment on that point. All we are advocating is that we address the supply-and-demand imbalance. A normal functioning marketplace will address that itself. Our concern is that the market will take too long to address it, simply because of the constraints that are there, and as a result prices will rise too dramatically in a short period. In the 12 months to June 2014, prices in Dublin were up by 21.5%. That said, the stock available for sale in January was at the lowest point ever. In January 2014 there were just over 3,000 units advertised for sale in Dublin, while in the previous 12 months there had been 10,000 transactions. One should have at least one year's supply and ideally two years' supply. The market should have had 20,000 properties advertised for sale, but it had 3,000, so prices rose by 2% a month, which, given the context, was not an exceptional level. It was undesirable, but we must take into account how low the stock was. By July the quantum of available properties had gone up by just 1,000 units. When we did the survey again in July there were 1,100 units available for sale. Prices are now rising by 1% a month rather than 2% a month. If one get the supply balance correct, the market will function normally. The challenge is that people are now focusing on this, and there have been ridiculous media headlines about queues when three people are in a line to buy a house. That is nonsense. It is not what makes the market.

We need to establish how many houses are required in Dublin and the mid-east in the next ten years. How many houses will be required in Galway, Cork and Limerick? For much of the rest of the country, there is no issue. Prices will not change that significantly in much of the north west or the south east because there is ample product. There are local economic challenges and it is not a market that will suffer from a supply-side shortage in the short term. We should be planning for the future; it is not a problem for this year or next year. However, in the regional centres where IDA Ireland has done a phenomenally good job, where local economies are doing much better, we have a significant shortage of product. We have not been building units and we have not been supplying them on the second-hand market. Unless we do something to change that pattern, we will have price inflation of 20%. The other part of that equation is that, as a hangover from the recession, half of the available properties are buy-to-let-type properties, but three quarters of purchasers want to buy a home to live in. They do not always meet the same requirements. There are many buy-to-let properties available for sale. People are looking to buy family homes, and therefore when a family home becomes available the price rises dramatically. Forty people come to view the property and suddenly that is all over the newspapers. We are trying to address that situation. Rising prices will bring some people out of negative equity and will allow their properties to come to the market. Rising prices will address a great many problems. It will make development more viable and we will begin to build more, but in the short term, prices will rise and make our economy more competitive. We are looking at key locations, albeit from a nationwide perspective. We are looking for development in the key locations to prevent this spiralling of prices.