Joan Burton (Dublin West, Labour)
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I am sure the Minister has had an opportunity to study with his officials yesterday's report by Daft.ieand the economist Ronan Lyons that shows a stunning and extraordinary increase in rents, specifically in big city areas such as Dublin, Cork and Limerick and throughout the country. The average rent has increased by 11.7%. As the Minister knows, that is way out of line with the consumer price index and any construction price index. In fact, it is now cheaper to service a mortgage than it is to rent. A mortgage for a three-bedroom house in Dublin 5 would cost approximately €1,287 per month, whereas the equivalent rent would be €1,500 per month. People's weekends and nights are filled looking for accommodation. Many of them are working. We are not just talking about people in receipt of rent supplement. When they do a deal with a landlord verbally, he or she frequently and increasingly gets back to them on the telephone to state another two or three individuals or couples are offering €200 or €300 more for the accommodation. While there are very many good landlords, it is now apparent that groups of landlords are squeezing unfortunate tenants for as much as they possibly can in the way of rent increases.

It is not enough for the Government to stand idly by. It has been in office for over six months, before which there was a long gestation period. Nothing has been done since the former Minister, Deputy Alan Kelly, put in place a structure requiring the holding of rents at a certain level for two years. This is about market failure.

The Minister, Deputy Simon Coveney, has very strong capitalist views which he has frequently expressed, but, even according to the theory of capitalism, if there is total market failure, that is a reason for the state to intervene and seek to regulate the market. The only way to regulate the market is to introduce rent certainty, rent control and longer leases, as is done in many other European countries, that is, give tenants an opportunity to have security of tenure, particularly where they have children because children settle into local schools and avail of local services and make friends. The alternative is to continue with the failed Irish model which involves a one or two-year lease, on the expiry of which people must go on the move again. In current circumstances it is genuinely difficult for people to find a rental property in the area in which they have chosen to settle.

I represent Dublin West which has one of the highest proportions of tenants in the State. I am all too familiar with the fact that, as the banks move in and take back more buy-to-let properties, the tenants must find another place to rent. They may have to move to another county and find other schools. The Minister must intervene to regulate this runaway market that is causing so much misery.

Simon Coveney (Cork South Central, Fine Gael)
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I thank the Deputy for raising this issue. As she knows, there are acute pressures in the rental market. These pressures are being driven by a number of factors, including rising demand, a lack of supply and the high costs that some indebted landlords face in servicing their loans. These stresses are confirmed by the latest data from the Daft.ierental report. The report shows that rent asking prices rose nationwide by an average 11.7% in the year to September 2016. In Dublin annual rental inflation is running at an average of 12.1%. Strong rent inflation is also seen in the Dublin commuter counties. These increases are placing huge pressures on tenants, particularly those who are seeking new accommodation.

The problems in the rental sector are undoubtedly part of a bigger issue. Ireland is in the midst of a housing supply crisis and shortage. The problems caused by high rents reflect, and are reflected in, the other issues facing the housing market, those being, not enough homes for first-time buyers, increased demand for social housing and unacceptable levels of homelessness. While many factors contribute to these problems, the one common to all of them is the prolonged and chronic lack of supply of new houses. This is borne out by the Daft.iefigures on supply. There were fewer than 3,700 homes available to rent nationwide on 1 October, with just over 1,400 of those in Dublin.

The best way to reduce and stabilise rents in the long term and benefit the entire sector is to increase supply and accelerate delivery of housing for the private and social rented sectors. Rebuilding Ireland, the Government's action plan on housing and homelessness, aims to increase and accelerate housing delivery across all tenures to help individuals and families to meet their housing needs. It sets out more than 80 actions that the Government is taking through new policy and legislation, significantly increased funding and innovative measures in the budget to achieve that aim. Pillar 4 of the action plan commits to developing a comprehensive strategy for the rental sector by the end of the year. I hope that we will have a new rental strategy by the middle of December, one that will try to balance the competing policy asks of, on the one hand, the need to help the people about whom the Deputy talked, namely, those who are finding themselves priced out of the market by rental inflation, and, on the other hand, to ensure that we do not shut down society by placing the dead hand of regulation on the market in our attempts to address what is a short-term to medium-term problem for many.

The Deputy called me a capitalist, but I am a pragmatist first and foremost. I see a problem and it is my job to try to fix it. As the Deputy knows, the previous Government took measures last year. They have had some effect, but they are not enough. We need to do more. We are examining the various ways in which we can introduce new approaches to address the dramatic rental increases in many parts of Ireland while, most importantly, encouraging an increase in supply. Otherwise, we will continue dealing with the symptoms of a supply deficit indefinitely. That is something that we cannot allow.

We have not been building houses in sufficient numbers for the past seven or eight years because the property market collapsed and the banking sector with it. As those sectors re-emerge, we will see increased supply. We must encourage that in a sustainable way while also taking other actions, given the pressures that many tenants face. There will be moves in that direction in the new strategy, which she will see in a few weeks' time.

Joan Burton (Dublin West, Labour)
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The Minister stated that he was a pragmatist, but if he were, he would have to recognise that the rental market has failed. When there is market failure, the Government must move in. Deputy Coveney cannot wash his hands of this matter as the Minister with responsibility. Like the previous Government, of which I was a member and a Tánaiste, the Minister has proposed a series of measures to build new homes, but he must acknowledge that it takes time to build even a rapid-build house. By the time that planning, site location and other issues are sorted, rapid-build houses can cost nearly as much as traditional ones and take much longer to build than was first outlined in the information provided to us.

Without taking away from the necessity to build new homes, the Minister must recognise that will take a long time. There will be a two-year to four-year gap before supply can catch up with market availability. In the meantime, the victims of an ever greedier cohort of landlords - not all landlords are like this and we have many good ones - are being placed under pressure by people who are making a bonanza out of renting to people who need to rent. I grew up in a rented house, so I can speak from childhood memory. The Minister could travel to Donegal and talk to voters and families in the Leas-Cheann Comhairle's constituency. Security of tenure was something that people in 19th century Ireland fought for and achieved. Unlike in most other parts of Europe, though, that security is significantly absent from the Irish property market now because of an ideological approach to the rights of the landlord versus the rights of the tenant. Will the Minister redress this situation? He will find no solution without doing that.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy knows me pretty well by now. I can be accused of much, but I do not wash my hands of problems. I have responsibility for the housing market, people who are homeless and implementing an ambitious housing and homelessness strategy for the Government. A piece of the jigsaw that is not fully filled in yet is a rental strategy, which we have committed to having in place before the end of the year.

There is considerable detail in the five pillars of our housing strategy. The only pillar that does not have as much detail as we would like is the rental pillar. For this reason, we need to address in the coming weeks some of the issues in the strategy that the Deputy has raised. We are holding broad consultations to get the balance right.

I will not wash my hands of this matter. We will be taking risks from a policy point of view. They will be managed risks in terms of making policy choices that we believe will improve the situation. What I do not want to do is make a bad situation even worse by introducing regulations that will stop the relatively small amount of building that has happened to date and the potential momentum to build many more rental properties. We must keep the momentum going.

I take the Deputy's point that all of this takes time. Even rapid-build houses cannot be built overnight. In the meantime, we have a broken market and I want to fix it as quickly as possible through increased supply first and foremost. We can provide supports and reassurance to the landlord and the tenant, both of whom are under stress at times. There is a significant number of tenants, particularly in the Dublin, Cork, Limerick and Galway areas where there is considerable pressure.

The House will debate whether we got the strategy right in some detail when we publish it in a few weeks' time, but we will make every effort to get the balance right so that, in two years' time, we will be discussing a market that is coming back towards equilibrium in terms of supply and demand instead of needing more emergency-type debates and measures because of a fundamental supply deficit that will exist indefinitely. We cannot have the latter.