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

I propose to take Questions Nos. 74, 78 and 247 together.

The Government is acutely aware of the difficulties in the housing market. As I have said on many occasions, the key problem is a lack of supply. This is why the Government is committed to increasing the supply of all types of homes: social, affordable, rental and owner-occupier. Under Housing for All, the Government has provided over €4 billion this year to accelerate the delivery of new homes. The Government has also intervened in other areas, including legislating for a residential zoned land tax and a vacant homes tax. These measures are working and in the past year around 28,000 houses were built, the highest number since 2008. However, over the past year we have experienced very high levels of inflation. Data released by the Central Statistics Office, CSO, show that annual inflation in the wholesale price of construction materials was over 16% in November 2022. The increase in costs is adversely impacting the viability of housing projects, which may make it difficult to meet our housing targets this year and beyond. To combat this, all options will be considered to boost the supply of housing.

On tax measures, our recent history suggests that an extremely cautious approach is necessary. In the past such measures were too broadly based and inefficient. They created distortions in the construction sector and proved very difficult to end. For these reasons and more, public expenditure measures continue to be the preferred method of State support. We must also recognise that money alone cannot solve the housing shortage. The viability challenge must be met using all the various tools available to the Government, including regulatory and legal means. In this respect, I welcome recent initiatives by the Department of Housing, Local Government and Heritage on planning reform and the forthcoming report on lowering the cost of construction. I will continue to work with my Cabinet colleagues to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of housing in both the public and private sectors.

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