Paul Kehoe (Wexford, Fine Gael) | Oireachtas source

He only left approximately 45 minutes ago.

It is clear that we have major challenges in the housing sector, the causes of which are well known and documented at this stage. The Minister, Deputy Kelly, has outlined these in his earlier contribution. Distortion in the housing market and the misallocation of resources through supply and demand imbalance is very significant and has the potential to affect every other area of a country's economy and competitiveness. As we know, the residential construction sector has been seriously damaged and is still in the process of being repaired. The process of repair has clearly taken longer to complete than in other sectors of the economy. Getting these distortions back into alignment is going to take some time but this realignment is necessary to rectify the terrible mistakes of the past.

Beyond individuals, housing is a major factor in our national economic competitiveness and fundamental to national economic recovery. Making it more affordable should have a positive impact on spending power and lead to a more competitive economy overall.

I will not claim that the Government has fixed everything in one Dáil term. We did not. Fixing it properly will take years. However, it is important to benchmark what has been done, what remains to be done and, more importantly, what we need to do and to consider our plan to get there. I am satisfied that the Government has laid the foundations and introduced measures that will bear fruit. The housing actions report published today details 31 major actions taken by the Government to tackle the problem in the past 21 months. The report is available on the website of the Department of the Environment, Community and Local Government and I encourage every Deputy and those watching and listening to download and read it.

On the issues that remain to be addressed, increased supply of all forms of housing is required. The supply of new houses and apartments is starting from a low base. The construction system appears to be struggling to make large-scale residential developments work. In 2014 and 2015 circa11,000 and 12,500 homes, respectively, were completed, less than half of the estimated requirement of 25,000 per year. Where we needed 50,000 homes, the sector delivered less than half of that amount. There was also a significant mismatch between the types of home needed and the types constructed. Some 57% of new households that will form in the Dublin area will be one or two-person households, yet 72% of all new housing coming on stream will be scheme or individual housing. The lack of supply leads to a slower rate of turnover of existing stock, which means that few houses are for sale for trading up or down. A key challenge is to increase housing supply of all types of home to meet pent-up demand. This requires a continual and increased whole-of-government approach, as the decision to build on this scale raises questions of viability, construction costs, the potential of households to meet asking prices and secure debt and the ability of builders to secure the necessary equity and finance.

Ireland's rental market doubled between 2006 and 2011 to approximately 320,000 households, some 20% of total Irish households. In Dublin rents are back to their 2007 boom-time peak. Interestingly and importantly, the rate of increase in private sector rents slowed in the final quarter of last year, with a slightly higher growth rate outside Dublin. The Residential Tenancies (Amendment) Act 2015 provides for an increased rent review period from one to two years, increased notice periods for rent reviews and greater protections for tenants and landlords. These measures will bring much-needed stability to the rental sector pending the coming on stream of new housing. However, to offer a secure, stable and attractive housing option, the rental sector needs greater supply and the associated marketplace competition.

In terms of social housing, the State has committed to helping those who struggle to meet their housing needs. Through the social housing strategy 2020, I am glad to say the State has been returned to a central role in the provision of social housing.

The significant increase in homelessness in the past year poses major challenges, not least for the families affected. The root cause of an increased number of families and individuals in homelessness is a supply shortage across the housing system. The solution lies in the broader response of increasing all forms of housing supply.

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