Noel Ahern (Dublin North West, Fianna Fail)

A consistent element of Government policy has been to promote adequate supply of housing to meet demand. Despite strong demand pressures and increased levels of mortgage lending, house price increases have moderated significantly in recent years from rates of around 40% per annum in the late 1990s. This is attributable to the large increase in housing output that has been achieved, including a new record of almost 81,000 completions in 2005, almost two and a half times the 1996 level. The Government will continue to focus on maintaining overall housing supply at a level consistent with the continuing strong demand and maximising the availability of affordable housing.

Our strong economic performance impacted significantly on housing demand in 2005, particularly through substantial increases in employment and immigration. Demand can also be further fuelled by additional factors such as excessive lending. On a number of occasions since mid-2005, I have expressed concern that developments in mortgage lending might impact adversely on the trend of house price moderation. The Department raised this matter with the Central Bank and I communicated on the matter with a number of lending institutions involved.

While it would not be appropriate to focus unduly on price variations over relatively short periods, there have been recent reports of higher rates of house price increase in the latter part of 2005. I would again like to call on all concerned to pursue prudent lending policies, particularly having regard to the already strong demand pressures in the housing market arising from real demographic and economic factors.

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