Brian Cowen (Laois-Offaly, Fianna Fail)

As the Deputy will be aware, housing policy is primarily a matter for the Minister for the Environment, Heritage and Local Government. From an economic perspective, house buyers benefit from a range of supporting factors, including healthy income growth, low income tax rates and relatively low levels of interest rates by historical standards. Affordability is also supported by the strength of the economy, record employment levels and relatively high savings rates. Recent indicators point to continued moderation in house price inflation in line with increased housing supply and higher European Central Bank interest rates.

The consensus among commentators is for this trend to continue, resulting in a gradual cooling and soft landing for property prices in Ireland. The Central Bank's financial stability report 2006 shares the view that this is the most likely outcome, while noting that increases both in house prices and interest rates are contributing to reduced house price affordability. House prices rose at a markedly reduced rate of only 0.1% in December 2006 and, according to economic commentators, this signalled the beginning of a slowdown and expected soft landing in the property market.

The Finance Bill 2007 confirms measures I announced on budget day, which will help to sustain economic growth and improve both take home pay and affordability of housing. These measures include a doubling of the ceiling for mortgage interest relief for first-time buyers as well as increases in relief for those other than first-time buyers.

Significant support is being provided for investment in social and affordable housing under the National Development Plan 2007-13. The housing programme in the NDP will total some €21.2 billion over the period of the plan. This represents a substantial increase over the investment level of €9.1 billion in the NDP for 2000-06. It represents an average investment of over €3 billion for each year of the plan.

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