Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
Link to this: Individually | In context | Oireachtas source

34. To ask the Minister for Finance his views on the continuing upward spiral in house prices and rent in 2015 and the increasing concentration of property ownership in the hands of a small number of large corporate investors, in terms of macroeconomic stability and the capacity of ordinary families to access affordable accommodation; his proposals to deal with this situation; and if he will make a statement on the matter. [1318/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

According to the Central Statistics Office, residential property prices increased by 6.5 per cent in the 12 months to November 2015. When one takes into account that property price inflation was over 16 percent in late 2014, this figure represents a significant moderation in price growth. As regards rents, the Private Residential Tenancies Board report that rents nationally increased by 8.6 per cent on an annual basis in the third quarter of 2015.   

Recent price and rent developments are primarily the result of a shortage in the supply of accommodation particularly in Dublin and to some extent in the other major cities. As the economy continues to recover there has been significant growth in the number of people at work which has led to increased demand for housing. While there is evidence of a pick-up in building activity, it has not yet reached the level necessary to match demand.

To improve housing supply, the Minister for Environment, Community and Local Government and I recently announced the Stabilising Rents and Boosting Supply package which was agreed by Government. This package is designed to provide greater stability in the rental market in the short run and support sustainable growth in the housing market. This package builds on the Construction 2020 and Social Housing strategies and is also complemented by the plans of NAMA to fund the construction of 20,000 units by 2020. In turn, these efforts should improve the capacity of ordinary families to access affordable accommodation as supply increases.

It is not clear what the Deputy has in mind where his question refers to an increasing concentration of property ownership amongst corporate investors. In fact, property ownership is well distributed across the income distribution as is clear in the CSO's Household Finance and Consumption Survey 2013. In terms of the private rental market, this is made up of a large proportion of small landlords. However, there is a clear need to professionalise the private rental sector in order to better serve tenants. To help address this issue, the REIT tax regime was introduced in the Finance Act 2013 to attract large scale investment.

In summary, I wish to assure the Deputy that my Department continues to monitor developments in the housing market, including their implications for macroeconomic performance and stability.