Coalition denies inaction on house prices

THE Government yesterday denied it had not done enough to tackle spiralling house prices as the latest report found between a third and a half of the population will soon not be able to afford a house.

Opposition parties immediately seized on the report by Trinity College economics professor PJ Drudy as evidence that the worsening housing situation was the legacy of seven years of the current coalition government.

Labour environment spokesman Eamon Gilmore accused the Government of ignoring the problem for years.

"The reaction of the Fianna Fáil/PD government has been to ignore the problem and to refuse to take any action to control the cost of housing, lest it reduce the profits of the builders and speculators," he said.

According to Prof Drudy's report, almost half of those living in Dublin and a third of those living nationally will not be able to afford their own home in two years' time.

With salaries rising at an average of 3% each year, the cost of new homes rises at between 11% and 19% annually. In addition, the report found the gap between the cost of building and purchasing a house was widening dramatically.

The economics expert revealed the average three-bed semi-detached house in Dublin costs no more than €100,000 to build, but sells for more than €300,000.

Reacting to the report's findings, Junior Housing Minister Noel Ahern said the Government was not denying there was a problem and insisted efforts were being made to ease the situation.

Mr Ahern said 68,000 new houses were built last year and that government policy was centred on increasing supply.

However, Deputy Gilmore expressed the urgency of the situation by revealing that a couple hoping to buy a new house in Dublin would now need a combined income of about €90,000.

"This excludes tens of thousands of couples who find themselves trapped in a housing limbo with incomes too low to buy their own home and too high to qualify for social housing."

Mr Gilmore said it was more important than ever that the recommendations made in the report of the All-Party Committee on the Constitution, published earlier this week, be adopted as quickly as possible.

"The Government can decide, at the drop of a hat, to have a referendum on citizenship and arrange for the early recall of the Dáil to rush the required legislation though. It is time the housing crisis was treated with similar urgency," he said.

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