David Norris (Independent)

I am grateful to Senator Ross for sharing time. I, and probably all Members of the House, share the Labour Party's concerns about the enormous increase in house prices. The house my father bought in Ballsbridge in 1946 and where I was reared was recently on the market. It was withdrawn at €3.5 million and the sale was negotiated for a substantially higher figure. It probably was sold for more than €4 million.

Senator Ross is correct about young people spending disproportionate amounts on mortgages. Approximately 33% or one third of their income goes on repaying mortgages. A rise in interest rates is expected on Thursday from the European Central Bank. That is likely to be not 0.25% as originally expected but 0.5%. It will add several hundred euro to the mortgage repayments of the average family. We might eventually reach the point indicated by Senator Ross, where banks will start to repossess properties. That will lead to the problem that arose in the British market some years ago, negative equity.

However, that might not reduce the price of houses in Dublin. According to the construction industry there is still a substantial under-supply of houses in the Dublin area. The market, therefore, will squeeze the price further up. There is also the problem of gazumping, where people make an offer for a house which appears to be accepted but, within a matter of days, the price increases in a fashion that is difficult to justify morally, whatever the legal constraints might be. An interesting case of gazumping was aired recently on Joe Duffy's "Liveline". The person involved was absolutely adamant and eventually secured the apartment at the original stated price.

There is enormous pressure on young people who cannot afford to acquire a house. Communities are being destroyed because young people cannot afford to buy houses in the areas in which they were reared, where the prices have been forced up not just by market forces but also by people coming into the area and investing in the housing market for profit. One good feature of the market is the exemption from certain types of duties for first-time buyers. That is a good idea. Affordable housing is also a means whereby young people might be able to get on the property ladder. However, even then it is difficult because they must get sufficient money together for a deposit.

It is worrying that so many builders have managed to get around their obligations by making payments. The Government should insist on the correct proportion of affordable housing. The greed of the construction industry has been clearly signalled by the fact that among the people with enormous incomes who have been under investigation recently by the Revenue Commissioners for non-payment of tax, a significant proportion of them generated these enormous sums from the housing market. However, that was not enough for them. They also sought to fiddle the banks.

While Senator Ross took on the banks, in which I am usually happy to join him, on this occasion I concentrate my fire on the construction industry. There are practices in the industry which must be examined. The price of housing in this country is absurd and will only lead to misery for young people.