Bernard Durkan (Kildare North, Fine Gael)
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158. To ask the Minister for Finance the extent to which an assessment has been carried out to clarify whether inflationary tendencies and speculative 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. [31120/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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My Department continues to monitor developments in the property market, including trends in property prices, on an ongoing basis. According to the Central Statistics Office's Residential Property Price Index, national property prices increased by 0.7 per cent between March and April, and by 13 per cent on an annual basis.

The underlying factors driving house prices now are fundamentally different from those which drove prices leading up to the financial crisis. The current inflationary pressures in the housing market reflect the insufficient supply response to meet the present demographic demands for housing, whereas previously credit was one of the primary factors contributing to house price inflation.

The credit environment now is markedly different. There is now an enhanced regulatory regime in place to monitor and manage risks to the economy emerging from the housing sector. The Central Bank's macro prudential rules aim to increase both bank and borrower resilience and mitigate the risks of credit fuelled house-price spirals emerging.

The availability of appropriate development finance for commercially viable residential projects has been identified as a key contributory factor for the ongoing shortfall in residential supply. The Government is meeting this challenge through the launch of Home Building Finance Ireland (HBFI) which will boost the supply of debt funding for residential development. Utilising up to €750 million, HBFI will fund new housing construction across all regions in the country, with the aim of boosting housing supply.

More generally, the Government’s response to mitigating inflationary tendencies in the housing market is contained within 'Rebuilding Ireland: An Action Plan for Housing and Homelessness'. The Action Plan sets out a comprehensive package of actionable measures designed to address the ongoing structural constraints within the construction sector and restore the housing market to a sustainable equilibrium.