There is no property bubble

-‘Policy shifts not stoking boom’

A new property bubble is not being stoked by Government policy shifts, Taoiseach Enda Kenny has insisted.

Mr Kenny moved to calm fears another boom and bust cycle was brewing as he announced 15,000 new dwellings will be completed this year.

That number is a big increase on the 8,900 flats and houses built in 2013, but short of the 25,000 per year the Government wants to see finished by the end of the decade.

Mr Kenny said the best way to prevent a property bubble was to build more houses — but not to the excess of the 90,000 dwellings being built per year at the peak of Celtic Tiger.

Speaking at a progress report on the Government’s push to create jobs, Mr Kenny said housing pressure would continue for up to two years due to the collapse of construction during the financial crisis.

The Taoiseach said housing provision was a key objective of the Coalition and he wanted to swiftly increase the amount of affordable new homes available.

“I don’t accept there’s a bubble, but I do accept that prices are rising because of the law of supply and demand, and you can’t sort those out until you build new houses, and to build new houses you have got to have a strategy, a combination of issues that can help that forward,” the Taoiseach said.

Mr Kenny admitted that the Government plans would not produce a “visible impact” for 18 months to two years.

He said changes to the planning process were needed to support the increase in house building, and that “income streams” for developers and would-be buyers needed to be looked at.

The Coalition drew fire over its pre-local election Construction 2020 blueprint for house growth as it floated the idea of the State guaranteeing part of the deposit put down by first-time buyers.

Opposition parties warned that the move could inflate a new speculative property bubble.

Mr Kenny said building 25,000 homes per year by 2020 would add 60,000 jobs to the construction industry.

The Taoiseach claimed the Government would exceed its ambition to create 100,000 jobs by 2016.

The Coalition’s action plan for jobs claims that 123 measures of out of 144 have been completed.

A national health innovation hub intended to boost the pharmaceutical and medical sector is also to be established.

Tánaiste Joan Burton said that 70,000 jobs had been created in the past 18 months.

Ms Burton sees a boost in house building forming a major plank of her attempts to revive Labour’s slumping popularity in the run-up to the slated 2016 general election.


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