Barry Cowen (Offaly, Fianna Fail) | Oireachtas source

Yesterday the homeless figures rose again by 35%. There were 1,026 families and 2,110 children homeless in Dublin. Despite all the apparent efforts that are being made to provide homes for people, this is an increase of 48% on last October's figures. None of us on either side of the House can be complacent about the homelessness crisis. We should make every effort to remove whatever obstacles that exist and are preventing families from leaving emergency hotel accommodation.

A major part of the housing crisis is the lack of supply and yesterday's announcement by the Central Bank is an effort to address it. We all know and appreciate that the 20% deposit requirement was putting enormous pressure on those who are saving to buy a house, particularly those who are already paying exorbitant rents. The Central Bank economists found that the average first-time buyer would have to save €64,000. However, the new requirements will still prohibit those who own apartments from buying a modest house to accommodate a growing family. They are the biggest losers in yesterday's announcement.

There is also a large chance that house prices will be inflated. The new rules will allow first-time buyers to borrow any amount if they have a deposit of 10%, so long as they meet the other criteria. The other criteria include a lending limit of three and a half times the income of the buyer, which we accept and acknowledge is common sense. There is no doubt that many people in the country will be relieved with the announcement as it will possibly enable them to get on the property ladder. However, when these rules are taking in conjunction with the Government's help-to-buy-scheme, some people will only now be required to have a 5% to 10% deposit. Essentially, 95% mortgages are back in town. With the limited supply of new homes on the market at present, there is considerable risk of further house price inflation.

We all know and accept that we want diggers on sites, but these initiatives, on their own, are a high-risk strategy. One of the problems of the housing market is a lack of supply and not enough construction. How is the Government confident about giving money to potential buyers so that they can outbid each other for limited supply. How does the Government believe that that will not inflate house prices? With building costs still very high, how is the Government sure that developers will not see this combined effort, on their own, as a massive opportunity for them to go back to the future when house prices went out of proportion?

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