Mr. Brendan McDonagh:

The Senator has raised a very good point. Some of the costs cannot be controlled within the State because there may be material costs which are affected by international pricing, like steel, for example. In general, house building is driven by bricks and mortar much of which is produced domestically. In my personal view the construction sector is no different to any other sector in that it should respond to the market. As the Senator says, the issue of competitiveness is very important. What we are seeing is that the cost of construction is one thing but the sales prices had gone below the cost of construction so therefore no private sector would fund the building of new housing units in that scenario. The sales prices have now gone slightly ahead in certain parts of the market. There are probably competitive issues to be considered. We have had a very vibrant construction industry but many of the skills have left the industry because of the downturn. We are trying to build back that capacity but the danger is that the scarcity of skills would drive up costs and that would not be helpful for the funding of new supply to the market. That is an aspect which the construction industry should examine.