Phil Prendergast (Labour)

I second the motion and welcome the Minister of State, Deputy Finneran.

The Minister of State will be well aware that ghost estates are a monument to bad planning decisions which perforate our landscape. They affect every county from Schull in County Cork to Malin, County Donegal and Clifden, County Galway to Balgriffin in Dublin. The main cause of our economic crisis is widely regarded as cheap credit leading to foolhardy lending. Bad planning ranks every bit as high as a cause of our economic meltdown and the high cost of social provision, which is also a reason for the collapse in our competitiveness. If we slip into a full-blown economic depression, bad planning will without doubt be found to have been the enduring cause.

Many people say that in Ireland all politics is local. While I can understand the reason this is said I have never subscribed to this view, rather I have always believed that national and local cannot be separated and that it is up to politicians to communicate this message effectively. This motion supports my view. With 2,800 ghost estates identified in the National Housing Development Survey, the decision of national Government to introduce appalling planning regulations has been brought home to every locality in the country. County councillors were because of these regulations able to force through so many ridiculous planning applications against the advice of local authority officials. My view on the electoral and sometimes financial advantages gained by this is already on the record of this House and as such I will not dwell on the point again.

The misery visited upon the residents of our nearly 3,000 ghost estates is a direct cause of that bad planning. The price paid for the houses, the failure to complete the developments and the poor servicing of them, are Fianna Fáil's legacy of 13 years in power, a fact that cannot be denied or brushed under the carpet. Fianna Fáil is the architect of the disaster which so many residents of ghost estates are experiencing and will continue to experience for some years to come. However, there is hope. Senator Hannigan has put forward some great ideas in regard to funding that could be accessed to complete these estates and serve an important social function.

Another important factor that needs to be considered is that not all ghost estates are incomplete developments. Some of them are finished but the houses are lying empty. There are many such estates in south Tipperary. I am sure that is mirrored all over the country. Even if every house was completed and every estate finished, we would still need a functioning market in which to sell them. Re-establishing a functioning property market is essential to economic recovery and is an indispensable part of the solution to the human tragedy of ghost estates. While I accept the Minister of State, Deputy Finneran, has put in place schemes to help people access housing, given the scale of the problem this response has been less than adequate. However, that is not entirely his fault as he does not have anything like the budget required even to begin addressing this problem.

Every now and then, an economist raises the spectre of mortgage defaults dragging our economy even further into the mire, leading to yet another revision of the figure for the structural deficit. I subscribe to this view. The Minister for Finance needs to recognise that a massive intervention in the housing market is needed and needs to look to National Pension Reserve Fund to finance it. It has long been argued that NTMA, which manages the pension reserve, should be investing in this country's infrastructure. Given the state of the stock markets, it would be prudent for the NTMA to consider alternative investments. There appears to be an opportunity in the housing market if the properties can be bought at the right price.

Official figures suggest house prices have fallen by 36% from their peak price. However, those who work in property sales say one would have to do better than that in order to sell. There have been a number of media reports of supposed fire sales where properties have been snapped up at a price 50% below the 2006 peak level. While the experts say we need property prices to reach a floor before the market recovers, we are already seeing signs of what that floor might be. There are metrics for pricing property which over the years have proven to be robust, one of which is to regard the average house as being three times the average household income. Another is to value individual properties at 14 times the rental yield of the property. Compiling accurate figures is difficult in these chaotic economic times. However, when I examined some reasonable estimations I found that these metrics suggest that fair value for housing stands at approximately 50% to 55% of the peak average house price of €310,000, in other words, between €145,000 and €155,000. If the NTMA were to invest in the property market at prices somewhat discounted from this, it would be making a sound long-term investment. I accept other people might dispute this and that they may be right. However, it is time to develop strategies to get the housing market moving again. It should be a matter of constant public debate so that an informed policy can be implemented by whomever is in Government.

The survey referred to housing estates in my area and stated that they had been completed to a high standard. While many have been completed to a high standard, some have been used as a dumping ground for discarded building materials and machinery, with many footpaths unfinished, which is a sad sight to have to look at when one has paid €300,000 to €350,000 for one's home. I am interested in hearing the Minister of State's response to the interesting views put forward by the Labour Party.