Dáil debates

Thursday, 5 July 2018

Home Building Finance Ireland Bill 2018: Second Stage

 

3:35 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Minister has said it cannot. Therefore, the finding is only for the construction. Those who bring forward schemes will still have to find 100% of the acquisition costs elsewhere.

Stage payments were abolished some years ago. That has been to the benefit of the consumers but it has created funding difficulties for those who are developing schemes because they do not get any money from the purchaser until the end of the process when the house or the apartment is being sold on. They are carrying very substantial development costs. It is not popular to say that, but that is the reality. If the sums do not add up, these scheme will not happen. That is part of the reason supply is lagging so far behind demand and that is likely to continue to be the case at least for another few years. I acknowledge that there was a significant increase in supply last year but it was from a very low base, a much lower base than we even envisaged.

It is good we now have accurate, hard Central Statistics Office data on home completions. The ESB connection measure was long discredited but was still being used as the official measure of home completions in Ireland. At least we have accurate data now but it underlines the scale of the problem where we have to get from 14,000 or 15,000 units to perhaps 30,000 to 35,000 units. Activity is being scaled up but there much more activity in the commercial construction sector in office and student accommodation developments than in residential developments. That is still a significant issue.

We will not see major changes by the Central Bank in its macro-prudential rules. I acknowledged that the Comptroller and Auditor General will be the auditor here. In effect, there will be accountability through the Committee of Public Accounts. It is important that those running this new company will come before the Committee of Public Accounts, be held accountable and answer questions on the operation of this fund.

Overall, we welcome this initiative. It took far too long to get to this point. We will engage in a positive fashion to seek to improve this. It needs to be kept under review. There is no getting away from the simple fact that finance is a vital ingredient in delivering homes. There is no point talking about a housing crisis in this House and decrying the private construction sector if we are not prepared to do something in a responsible way to assist in the delivery of the homes our people need throughout this country. We look forward to Committee Stage, which I presume will be in the autumn.

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