Terence Flanagan (Dublin North East, Fine Gael)

The main domestic problem is the property market. The fall in house prices over the past year has had a major knock-on impact on construction activity. Employment in construction is falling and the live register is increasing. Exchequer returns for January highlight the effect on stamp duty receipts, which are a major source of income for the Government. They have halved, which constitutes a major problem. The Government parties must be held accountable for their mismanagement of the property market. They failed to control prices and, having overheated the market, were then directly responsible for the stamp duty debacle, which sent it plummeting.

While house price moderation will be a welcome development for the many thousands who wish to purchase a home, there is a real danger that people who have bought a home in the past two years using 100% mortgages could find themselves in negative equity. A rise in unemployment that was coupled with heavier debt burdens could increase the number of home repossessions in the coming years. The number of repossessions has already trebled since 2004 according to figures supplied by the Department of Finance.

Ireland also could be in line for serious home-grown sub-prime problems as those who over-stretched themselves with heavy mortgages during the boom times and who were helped by the financial institutions that the Minister did not bother to regulate before last Friday, face a harsher economic climate. Young men in particular are at risk of falling into the unemployment trap unless clear pathways are outlined for them to acquire transferable skills. There must be a significant focus on retraining and educational opportunities for such workers.

As for social and affordable housing, the Government has delivered half of what it promised——

See this speech in context