Batt O'Keeffe (Cork North West, Fianna Fail)

I am grateful to the House for allowing me time to make a presentation on housing. As public representatives we have a particular interest in it. I thank the Senators for their thoughtful contributions. I wish to reiterate a number of key points and to respond to a number of the issues raised.

Senator Coffey spoke about the CIF and targets. I wish to put this into perspective. The CIF issued targets for 2007 indicating that 90,000 residential units would be built in 2007. It got it wrong; it will be 77,000. I fear the 2008 target of 45,000 does not correspond with the targets that we envisage or with the targets of what I would call reputable economists. I am concerned that developers are cutting back and that it might be somewhat overdone. I would say to developers that for ten years they have done exceptionally well under the good management of the economy. There are signs of some developers being able to pull back at this stage.

I would say to young people and first-time house purchasers that a frenzy was created in 2005 and 2006 to get on the property ladder and people felt if they did not do so they would never have a chance. The result was inflated prices from two sources. At the same time the banks were offering 100% loans with all the other add-ons that were part and parcel of it, all of which led to an intolerable situation that has come back to haunt us. The last thing I want is for the prophets of doom to suggest this is not a good time to buy. The mortgage interest relief given in the last budget equated to three ECB interest rate adjustments. In addition stamp duty has been eliminated for first-time house purchasers and tax was reduced. Houses are now more affordable because prices have reduced. Therefore the climate is favourable for young people to purchase houses in the knowledge of the promise of further mortgage interest relief in the next budget.

It should be the norm for young people to bargain about the asking price. Good bargains are available for young people who want to buy houses at affordable levels. I want to ensure that in 18 months we do not have underdevelopment in housing with an imbalance in the market leading to price inflation coming back to haunt us again. The developers have a duty to young people from the profits generated over a ten-year period to ensure this imbalance and the apparent trend do not continue. They need to play their part in ensuring adequate output.

Senator Coffey also mentioned the number of vacant houses. The IMF report pointed out that the vacancy rate in Ireland is lower than the European norm. We have also made wonderful strides in the area of private rented accommodation. A great number of new housing units have been built. In 2002 30,000 private rented accommodation units were registered. By the end of 2006 that figure stood at 200,000, which is a marked increase. To increase the number of inspections carried out we have increased funding to the local authorities by 50% in this year. I will give 50% to cover those that are registered and I will give 50% in the first tranche to the objective they have placed which is the number of inspections they will carry out. At the end of the period, if they have met their target of inspections I will reward them with the rest of the funding. There is a dramatic improvement in the number of inspections carried out.

On investigation we discovered that 80% of rented accommodation was of good quality. I am not saying there are not rented units of inferior quality — of course there are. However, if a local authority housing officer comes across accommodation that is below standard, the PRTB exists to report that. Its duty is to ensure the standards are maintained and to take issue with any landlord who has inadequate accommodation, particularly those who are not registered. A tax incentive is available for those landlords whose property needs to be upgraded.

The factors relating to the output of housing will depend on the economy. Growth in the economy for 2008 is predicted to be 3.25%, one of the highest in Europe. All of the rudiments for the purchase of affordable houses are in place. The partnership, which has always been consistent with what we have done, should be adhered to in this instance.

Senator Donohoe stated I did not mention social, affordable or voluntary housing or RAS. However, I referred to the investment of €21 billion in this sector by the Government under the national development plan. It is envisaged 17,000 units will be delivered over a three-year period in that sector and, under the plan overall, it is hoped 140,000 social and affordable units will be delivered. The Government is committed to capital projects and to local authorities building homes. We would like to be as innovative as we can, whether that relates to social or affordable housing, and we are open to and will entertain other views to ensure social and affordable housing output continues to increase for our young people.