Terry Leyden (Fianna Fail)

First-time buyers face difficulties in today's housing market and the Minister for Finance, Deputy Cowen, has been examining ways to ease those difficulties, particularly in Dublin. According to Colin Smith, branch manager of Sherry Fitzgerald, most first-time buyers are spending up to €500,000, a massive amount, on a house. Given that stamp duty exemption stops at €317,000, it is clear many buyers are unable to avail of this benefit. That is the rationale for exempting first-time buyers from the duty.

I am not convinced that simply increasing the threshold would have the desired effect. We must ensure any reforms put in place in the market are targeted to benefit first-time buyers directly, rather than simply giving an excuse to developers to hike up their prices. There is always a danger that if extra exemptions are given, prices will rise. Simply increasing the threshold for stamp duty exemption would be offset by developers increasing their prices to compensate for this concession.

Local authorities should play a more proactive role in the provision of subsidised sites for first-time buyers. The buyers would then be free to negotiate the best deal for construction rather than be held hostage by developers who just sell for the highest possible price. A survey by Halifax last September found that key public sector workers, such as nurses, teachers, fire fighters and gardaí, were being priced out of the market in virtually all the State's biggest cities. In Dublin, homes were found to cost more than 13 times average public sector annual salaries. This places a massive burden on first-time buyers. Mortgage repayments over 35 years on a modest house can be well over €2,000 per month in Dublin. We must examine ways to improve the situation.

The Government acknowledges that there is a difficulty. How to solve it is the issue. We have faced many dilemmas in the past and solved them. Outside Dublin land is difficult to acquire. The low cost housing scheme, being developed by Mr. Geraghty and others under the national agreement, will bring many houses on stream. I am not familiar with the greater Dublin area but county councils in areas such as Donegal and Roscommon should be more proactive in acquiring land for housing sites for individual applicants. This happened in Hawthorn Drive in Roscommon town. Sites were sold for €20,500. This brought the cost of a house to approximately €160,000, a manageable price. However, I cannot persuade the county managers to open their wallets and provide housing sites for individuals.

If I were a county manager in Roscommon, I would have bought tracts of land throughout the county to provide in the future for young couples looking for houses. I would not wait for Government initiatives; I certainly would not wait for the Opposition to put forward solutions. I have great sympathy for the Opposition at present because it is difficult to be in Opposition when there is a strong and active Government.