Michael Brennan (Progressive Democrats)

I second the amendment. The subject of the motion, like many of those before us in recent weeks, reflects a source of genuine anxiety and concern among the public, not just among first-time buyers but also their parents and families, and among the many people coming to live in our country. The Labour Party motion is welcome in that it provides an opportunity to discuss this serious topic. I would have preferred the motion to be a little more extensive. To compare it to a story, the Labour Party motion presents only "the middle", says little about "the beginning" and worst of all does not even suggest "the end" or a path towards it.

It would be useful to set out some of the context to the problem of land and house prices. The House should be aware that the overall objective of Government policy on housing is to enable every household to have available an affordable dwelling of good quality, suited to its needs, in a good environment and as far as possible for the tenure of its choice. In general, the principle applied is that those who can afford to provide for their housing needs should do so either through home ownership or private rented accommodation. In tandem with this, supports should be available and targeted to others, with due given regard to the nature of their need. I doubt there is much disagreement on either side of the House — even from the Labour Party — with that approach.

This policy objective has to be pursued in a demanding environment. A person's home is his or her castle, so to speak. It is people's shelter and is where they and their families grow and share in the experiences of life. Whether for historical, social or cultural reasons, Ireland has a high rate of home ownership and Irish people see owning a home as an important element in their lives. There are other less obvious considerations. The provision of quality housing is fundamental to our economic development. In the past the Minister has outlined how housing is an important element of our national infrastructure and thus has a key role to play in maintaining Ireland's competitiveness. As a quality of life indicator, good quality housing is a factor in inward investment decisions for example.

The most pressing demand comes from our expanding population and thriving economy. After a slight fall between 1986 and 1991, the upward trend in population resumed in the early 1990s. This trend has strengthened further still in this decade, with the 2002 population being the highest recorded since the census of 1871. Our economic performance must also be taken into account. The national accounts for the end of 2005 show GNP to have increased by 7% since the same period in 2004. The figures point to an economy that is performing well and better than some had previously thought. The ESRI believes this strong performance will continue into 2006.

People are showing an increasingly positive perception of their current environment and their economic expectations. Despite the recent spike in fuel prices and well-aired concerns about personal borrowing, the overall consumer sentiment index published by the ESRI was 98.8 in April compared to a figure of 92.3 in March. Consumer optimism is strong.

When these population and economic factors are added to the aforementioned mix of high rates of home ownership and our age demographic, the result is similar to that reflected in the Educational Building Society and DKM economic consultants' report published yesterday. Its housing study has found that couples buying a house for the first time spend almost one third of their monthly income on mortgage repayments.

The affordability index also found that Dublin buyers spend at least 32% of their income on mortgage repayments, an increase of three percentage points since last year. Spending across the rest of the country averaged at 27%. As a proportion of disposable income, mortgage repayments are at an historic high. There is also the likelihood of a large interest rate increase tomorrow, perhaps as much as half of 1%, double what many expected. This could add €56 to the repayment cost of a typical first-time buyer's mortgage, on top of the €56 increase already levied this year.

Immense pressure is being put on the housing market. More important, immense pressure is being felt by people across the country and young people, in particular. The Government's policies are having a positive impact but in the face of the sheer demand, relief is difficult to identify. We know that tinkering around the edges of the problem achieves little. This was tried in the mid-1990s, but it was only when we started to get serious about supply that progress was made. A massive number of new houses are being constructed. The total number of house completions for the first three months of 2006 was 22,000, an increase of 15% nationally. Contrary to the impression given in the Labour Party's motion the figures show that Government policy continues to facilitate strong housing supply.

The Government has, correctly, made clear that the focus is and will continue to be on maintaining the high levels of housing supply for all members of society, in tandem with targeted policies aimed at increasing the provision of social and affordable housing. On this front, I commend the Minister and the Government on the announcement yesterday of record funding of more than €1 billion for social housing and an extra €100 million for the main housing programme. Contrary to the thrust of the Labour Party motion, this announcement will provide €942 million for local authority housing, €45 million for Traveller accommodation and support, and €48 million for remedial works to local authority dwellings, all of which is necessary, welcome and commendable.

On maximising the monetary value and value to the public of publicly-owned land, it would seem wise that the State, via each local authority would have a comprehensive and up-to-date inventory of lands owned, or in any way controlled, by local authorities. I suggest that a full audit of such land, its use, and its zoning would help to inform proper planning decision making. It would at least ensure that local authorities can honestly say they are using all appropriate resources available to them to fulfil their duty in regard to providing housing.

The Opposition motion refers to the successful provision of affordable housing by Irish firms operating in the UK. They are not the first to recognise this. I understand an Oireachtas committee made a visit to one such scheme in recent weeks. I also understand that work is being done to look into how schemes and practices abroad can be adopted and adapted for use in Ireland with a view to having the same benefits accrue to Irish home buyers. The Progressive Democrats firmly support this work.

There is no doubt that we have some way to go in addressing the problem of house and land affordability. The National Economic and Social Council has said that given the remarkable strength of demand, a significant increase in house prices is inevitable. This is no comfort to those first-time buyers, their parents and families, the many new people coming to our country and the groups I referred to at the outset of my contribution. Neither is it any comfort to them to hear that house price increases have moderated greatly since annual house price inflation peaked at an incredible 48% eight years ago. They will not be impressed by the fact that the quality of Ireland's housing stock is high. The vast majority, 92%, of households surveyed during the national survey of housing quality expressed satisfaction with the general condition of their accommodation, their area and their neighbourhood.

Nevertheless, the achievements did not happen by accident. It has taken policy and action by Government, over years rather than months, to provide the conditions for greater housing supply, increased construction employment, moderated house inflation, €1 billion funding for social housing and good quality housing. Further steps are needed as is clear from the Labour Party motion. However, it is a pity its motion was not more comprehensive and constructive.