Stephen Donnelly (Wicklow, Social Democrats)
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I take on board the points the Minister makes. We both agree that supply must increase and that people need access to the market. I agree fully that many first-time buyers cannot raise €20,000 to €50,000. Where we might differ is that I believe the access argument applies both to first-time buyers and the negative equity generation. While I do not agree with what it is doing, I ask that the Minister at least consider before Report Stage including that group too. The measure is obviously going to go through. I take the Minister's point that increasing prices reduce the net liability of somebody in negative equity, but the argument he made about first-time buyers not being able to save the deposit applies to the negative equity group. Even if prices go up and their liability goes down, they are at best still dealing with debt the first-time buyer does not yet have, but they are trying to buy the same homes and cannot save the deposit. If the Minister is going ahead with this measure, as he obviously is, I ask him to consider on Report Stage extending it to the negative equity generation. He is literally talking about the same people standing in the same queues to try to buy the same houses. He is introducing something that will help first-time buyers to save a deposit, on which I take his point, but the men and women standing beside them cannot save a deposit either. He might take this into consideration.

The Minister made a point about supply and demand.

I agree that if the Minister changes the demand curve, which is what this will do, supply will be affected. I never suggested that would not be the case. My point was that if one tries to increase the number of houses being built, which is the equilibrium between supply and demand in any given area, by moving supply through rezoning land, site value taxes and other supply side measures, the supply will increase but, critically, at the same time, the average price of a house will reduce, which is important. While I accept if demand is fuelled, the number of houses that are built will increase, the problem I have is the price will also increase. It is my contention that higher property prices in general are bad for society because we end up further in debt.

The Minister presented a reasonable argument in terms of this being a policy to help first-time buyers save a deposit because they are caught in a trap. If there were some other way of achieving that, which did not potentially push up prices, such as the Central Bank saying it will retain the income ratio of 3.5 but reduce the size of the deposit because it is causing all sorts of unintended consequences and is locking people out - the affordability point is the income multiplier - would the Minister scrap this scheme?