Michael Finucane (Fine Gael)

When Fianna Fáil and the Progressive Democrats first came to power in 1997, their concerns about increasing house prices led them to commission Peter Bacon and Associates, a firm of economic consultants, to produce a report with the objective of dampening house prices. The firm followed up with two further reports in 1999 and 2000. However, house prices have since escalated out of all control, with the average house price in the first quarter of this year standing at €375,000 in Dublin and €245,000 outside the Dublin area, and the interest expressed in 1997 with regard to reducing prices has gone by the board. The Taoiseach recently said the property market is doing well but I would point out to him the market is doing well for people who already own houses but is impossible for those trying to get on the property ladder or stuck on local authority housing lists.

I remind Senators that when we bought our houses, mortgage institutions lent on the basis of twice the annual salary. They now provide 100% mortgages on the basis of five or six times borrowers' annual salaries. Even those who were successful in getting mortgages are in danger of falling into an economic trap in the future. While the Government will point to the 70,000 or more new houses built each year, a lot of houses in estates are being bought by investors on the basis of low interest rates and leased to people from eastern Europe. First-time buyers are in the minority on many estates compared with those from eastern Europe who are renting.

I want to know how the Government intends to address the issue of escalating house prices. Has it given up hope at this stage? People are concerned about how they can cope with these prices. The Bacon reports have been long since forgotten and the promises made in 1997 have not been fulfilled.