Bertie Ahern (Dublin Central, Fianna Fail)

As I stated, it looks as if the figure for this year will be approximately 77,000 units, which would be very high. The Department's assessment is that the figure for next year will be in the order of 55,000 units plus. Activity in other areas of construction — house refurbishment, retail and office developments — is high and will take up much of it. That tends to be the view.

It is not a question of wait and see. A moderation in price is a good thing. I have answered questions on this matter for the past few years. A little over a year ago, in the third quarter of 2006, as we moved from 25,000 houses upwards we still saw a price increase of 28%. The fact that there is a moderation in prices is good for the market. If this means a reduction in the overall number of houses built, so be it. We were never going to stay up at the level of 85,000 or 90,000 units. I would far prefer to see supply and demand coming into equilibrium with a slower rate of house inflation. That is what we have been trying to achieve for the past seven or eight years.

If we moved from 77,000 units this year with no take up in the other sectors, it has been estimated that 30,000 people could be unemployed, but a substantial number of those would be absorbed into other sectors. We are likely to see an increase in the level of unemployment in the private house construction sector. We will hold discussions with the Construction Industry Federation and others. I was in contact with the CIF last night and we do not foresee a position where the major contractors hold back and play a wait and see game. They are the ones who have planning permission and can proceed with contracts. They are waiting to see what will happen in the market.

Many contractors would say the banks have tightened up on the pre-sale arrangements under which they lend to them. Up to last year the banks allowed contractors to build up to 40 or 50 houses without them being sold but now they operate on a system of lending for five or ten houses. I do not have that information but that is what the construction sector has said. That would force the building sector to slow down.

From all the analysis of the next few years based on population, age structure, reduced household size, immigration and housing stock being below the EU level, it still appears there should not be a reason for the figures to reduce excessively. That is the professional analysis of people within and outside the Government. I cited the DKM report recently.

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