Michael Ring (Mayo, Fine Gael)
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Question 768: To ask the Minister for the Environment, Heritage and Local Government the assessment his Department has undertaken of the potential impact on house prices as a result of the development levy; and if he will make a statement on the matter. [27636/06]

Noel Ahern (Dublin North West, Fianna Fail)
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House prices are not determined solely by the cost of building, but by the interaction of supply and demand in the market. The revised system of levying development contributions under the Planning and Development Act 2000 has not affected the level of supply, as is demonstrated by the fact that housing output reached a new record level of almost 81,000 in 2005. This very large increase in housing output has helped to restrain house price increases in the face of continuing very strong demand pressures and increased mortgage lending.

The Government will continue to prioritise effective action to maintain current high levels of supply in the housing market and in particular, will accelerate measures to assist those who cannot access affordable housing without assistance. A key component of this strategy is ensuring a supply of serviced land for housing which the development contribution system helps to fund. If developers were not required to contribute part of the cost of servicing the land that they use to build houses, servicing new land would become more difficult or an even greater burden would fall on taxpayers.