Bernard Durkan (Kildare North, Fine Gael)
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346. To ask the Minister for Finance the extent to which an assessment has been completed to clarify whether inflationary tendencies and speculatory practice in the building sector during the economic boom continues to impact on the provision of a comprehensive housing programme in the current climate; and if he will make a statement on the matter. [1968/17]

Michael Noonan (Limerick City, Fine Gael)
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As developments in the housing market can have a significant impact on the economy as a whole, my Department monitors developments on an ongoing basis including as regards house price developments.

From their peak in 2007, house prices contracted by 43.3 per cent before reaching a trough in 2013. The subsequent recovery in the economy and the sustained period of employment growth has underpinned the recovery in housing demand. From the trough, house prices have increased by 48 per cent but remain 32 per cent lower than their previous peak in 2007.

The underlying factors driving house prices now are fundamentally different to those that prevailed in the period leading up to the peak. The current pressures in the housing market reflect an as yet insufficient supply response to meet current demographic demands for housing, leading to house price inflation. The Rebuilding Ireland, Action Plan for Housing and Homelessness contains a range of actionable measures to address the structural constraints within the housing market which are affecting supply. These  actions aim to streamline the planning system, remove infrastructure blockages and support the delivery of affordable housing, thereby helping to improve the viability of construction in urban areas where supply is particularly constrained.

Mortgage lending, which helped fuel the speculative behaviour in the housing market prior to the financial crisis, remains low relative to analysts' estimates of the medium term sustainable level of mortgage lending.  The Central Banks macro-prudential regulations aim to curb unsustainable lending practises by regulating the loan-to-income (LTI) and loan-to-value (LTV) ratio. The Central Bank has recently completed the first review of the macro-prudential regulations and will continue to monitor the effectiveness of the regulation on an ongoing basis, taking into account changing economic circumstances.