Paul Kehoe (Wexford, Fine Gael)
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Question 110: To ask the Minister for Finance if he has assessed the affordability of house purchase for young families in view of the 40% increase in the cost of mortgages in the past 12 months and its implications for Government policy. [4146/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As the Deputy will be aware, housing policy is primarily a matter for the Minister for the Environment, Heritage and Local Government. From an economic perspective, house buyers benefit from a range of supporting factors, including healthy income growth, low income tax rates and relatively low levels of interest rates by historical standards. Affordability is also supported by the strength of the economy, record employment levels and relatively high savings rates. Recent indicators point to continued moderation in house price inflation in line with increased housing supply and higher European Central Bank interest rates.

The consensus among commentators is for this trend to continue, resulting in a gradual cooling and soft landing for property prices in Ireland. The Central Bank's financial stability report 2006 shares the view that this is the most likely outcome, while noting that increases both in house prices and interest rates are contributing to reduced house price affordability. House prices rose at a markedly reduced rate of only 0.1% in December 2006 and, according to economic commentators, this signalled the beginning of a slowdown and expected soft landing in the property market.

The Finance Bill 2007 confirms measures I announced on budget day, which will help to sustain economic growth and improve both take home pay and affordability of housing. These measures include a doubling of the ceiling for mortgage interest relief for first-time buyers as well as increases in relief for those other than first-time buyers.

Significant support is being provided for investment in social and affordable housing under the National Development Plan 2007-13. The housing programme in the NDP will total some €21.2 billion over the period of the plan. This represents a substantial increase over the investment level of €9.1 billion in the NDP for 2000-06. It represents an average investment of over €3 billion for each year of the plan.

Richard Bruton (Dublin North Central, Fine Gael)
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The Minister may think the property market will have a soft landing, but there is certainly no soft landing for first-time buyers. Is the Minister aware that the figures for the housing market show the percentage of houses bought by first-time buyers has declined rapidly, from over a half in 2004 to less than one third now? This clearly indicates first-time buyers are being squeezed out of the new house market, as they have already been squeezed out of the second-hand market.

The Minister adverted to the national development plan and social and affordable housing. Does he accept the Government has delivered just 45% of its own target for social and affordable housing? More than twice as much social and affordable housing would have been delivered to young families if the Government had met its targets. How does he square this with the complacency that seems to exist in Government circles? A body like the Central Bank, which is hardly a hotbed of social policy, tells us that half of young families cannot afford to buy a house, a figure that will increase to 60% if changes are not made.

The Government must get real with regard to first-time buyers and begin to deliver realistic opportunities for them to have affordable homes in places where they can have a sustainable lifestyle.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government's housing policy will tackle issues of affordability through supply side actions. Maintaining the pace of housing supply in line with our future demographic requirements is a primary objective of Government policy——

Richard Bruton (Dublin North Central, Fine Gael)
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The policy is collapsing. The targets are not being delivered.

Brian Cowen (Laois-Offaly, Fianna Fail)
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——which has a critical role to play in securing balance in the marketplace and supporting affordability, particularly for first-time buyers.

The Department of the Environment, Heritage and Local Government's housing policy framework outlines Government plans to reform the social and affordable housing sectors and support the expansion of home ownership. We are working towards building sustainable communities through a capital investment programme of €4 billion over the next three years. Some €17 billion will be invested in social housing with the aim of delivering a greater quantity of social housing options and improving the overall quality of the tenure. Some 27,000 new homes for people in need of social housing will be commenced or acquired over the period 2007 to 2009 and it is estimated that over 60,000 new social housing units will be provided over the full period of the national development plan.

The Affordable Homes Partnership, established in 2005 for the greater Dublin area, will build on its growing experience to assist in the roll-out nationally of certain initiatives. Investment of €4 billion under the plan will provide support for people seeking accommodation in the owner-occupied sector through the provision of affordable housing. It will also assist in the upgrading of the physical conditions of certain categories of private housing with particular emphasis on those who are most in need, including people with disabilities and older people. Some 17,000 new affordable units will be delivered over the period 2007 to 2009. The financial framework reflected in the plan will allow for broadly similar levels of output beyond 2009, resulting in some 40,000 households benefiting from affordable housing over the period of the plan.

Richard Bruton (Dublin North Central, Fine Gael)
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That is all bluff and bluster. The Minister should consider the hard figures. The Government committed to producing almost 7,000 social housing units and 4,000 affordable housing units, but it has achieved less than half of that target. All this talk about what will happen in the years 2007 to 2013 does not butter the parsnips for people who are waiting for housing but find that, as the Central Bank has told us, half of them cannot afford it and that they are being squeezed out of the first-time buyer new housing market as they are replaced by investors, which has been demonstrated.

That is the reality on the ground. There is no point going to the word processor and reading out scripts which are delivered to the Minister's desk by I know not whom. The Minister should take a look at the reality around him. Perhaps the situation is different in Offaly from that in Dublin but this is the reality for people in Dublin. They cannot afford housing and the promise of affordable housing is not being delivered.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It would be better if some of the local authorities in the greater Dublin area which are populated with majorities from the Deputy's party were more supportive of housing development than is the case. I can point to a few who have been less than helpful in making sure we maximise housing development prospects within their local authority areas. That is an issue about which the Deputy has done nothing.

Richard Bruton (Dublin North Central, Fine Gael)
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The Government collapsed its own policy of 20% for social and affordable housing. It has not pursued its own policy.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy should get his house in order and support construction. I have to listen to Deputy Burton constantly talking about builders. At the same time, the Deputies do not want houses.

Richard Bruton (Dublin North Central, Fine Gael)
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The Minister is in Government. He can start lecturing when he is——-

Joan Burton (Dublin West, Labour)
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Does the Minister realise there are families with two children in my constituency who are living in one-bedroom so-called affordable apartments? They cannot trade up because they do not have enough income, even though they are working in high-tech companies. For a single income family, the penalty in extra tax is almost €5,000 per year on their after-tax income. They would be better off on the dole as a family in Dublin West would get €1,200 to €1,400 from the community welfare officer. What has the Minister to say to these families? What does he consider "affordable"? Is €320,000, which is what the Affordable Homes Partnership is offering for a starter house in Dublin West, an affordable price if the family is on one income? The Minister should get real.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I reiterate that the people who need to get real are those in local authorities populated by the Deputies' parties, who are doing everything they can to stop housing developments in the greater Dublin area.

Joan Burton (Dublin West, Labour)
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It is those in the Minister's party who own all the land. It is the seven developers who own all the land.

Brian Cowen (Laois-Offaly, Fianna Fail)
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They succumb to the NIMBY factor. They are doing nothing about affordable housing. The Deputy should ask Deputy Gilmore what he is doing in his local authority area. He talks about local housing in this House when his party has a majority on that local authority, which is a disgrace for the amount of housing it provides.

Joan Burton (Dublin West, Labour)
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The Minister should talk to his developers in the tent.

Joan Burton (Dublin West, Labour)
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On a point of order, the Minister is an inhabitant of the tent at the Galway races where the developers who own the bulk of land in my constituency hang out with him.

Brian Cowen (Laois-Offaly, Fianna Fail)
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That is all cant. The Deputy is full of cant.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy is politically paranoid. That is her problem. The Labour Party should not talk to me about housing.

Joan Burton (Dublin West, Labour)
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Tell that to the people of Dublin West.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Labour Party talking about housing is a joke.

Joan Burton (Dublin West, Labour)
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The affordable houses are a joke.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Labour Party should get their local authorities in order.

Joan Burton (Dublin West, Labour)
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Our local authority is the best in the country. The Minister is never done praising Fingal County Council.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy is a joke.