Ruairi Quinn (Dublin South East, Labour)
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Question 207: To ask the Minister for the Environment, Heritage and Local Government his view of the situation whereby tax incentives being offered to property investors are driving up house prices at a time when housing lists are growing and social housing provision is at an all time low; and the strategy he intends to take to ensure the recommendations of the NESC report are carried out. [5317/06]

Noel Ahern (Dublin North West, Fianna Fail)
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The unprecedented demand for housing, consequent on rapid economic growth and demographic changes, has been the major driver of house price increases in recent years. Although precise information is not available, it is clear there has been significant activity over this period by investors in the housing market. This is to be expected in a growing economy. While at different times and locations this may have an impact on prices, there are also gains in terms of the supply of private rented accommodation, tourist accommodation and revitalisation of areas. The winding down of some property-based tax reliefs announced in the budget for 2006 is consistent with the greater capacity of particular economic sectors to fund such investment from their own resources.

Against this background, the key focus of the Government's strategy in the housing area is to increase housing supply to meet the diverse demand. This approach has been endorsed by the National Economic and Social Council, NESC, in its Report No. 112, Housing in Ireland, Performance and Policy. The effectiveness of this approach is seen in the substantial growth in housing supply, with almost 81,000 new homes completed in 2005. House price increases have moderated significantly in recent years and this is largely attributable to the large increase in housing output achieved in recent years.

Substantial investment has been made in targeted measures to assist those with affordability problems, and some 100,000 households have benefited from these measures over the past nine years. This, combined with overall increases in housing supply, has impacted positively on housing waiting lists. The most recent housing needs assessment showed a 9.7% decrease compared with the 2002 assessment.

Building on the achievements to date, during 2005, we brought forward new initiatives to specifically address the policy challenges for the future raised in the NESC report. In June, we launched the affordable homes partnership to co-ordinate and accelerate the delivery of affordable housing in the greater Dublin area. In December, we launched a new housing policy framework, Building Sustainable Communities. This sets out the fundamentals of the Government's vision for housing policy in coming years. The framework outlines a substantial increase in investment. This includes starting some 23,000 new social homes over the coming three years which, together with affordable housing and other housing options, will allow for some 50,000 households to be assisted over the coming three years. We will also be rolling out a programme of reforms particularly focused on improving the quality of the social housing environment. A more detailed document will be published during 2006.