The Minister of State with special responsibility for housing, Mr Bobby Molloy, has predicted that it will take at least two years before house supply can meet the huge demand. Following the release of the latest figures showing no let-up in house price inflation, he said yesterday nobody ever believed there was "an instant solution".
"It would be absolutely unreal to expect the effects of the Government action on house prices, launched on April 23rd, to be reflected in statistics for the quarter ending June 1998", the Minister said.
There was never any expectation that the measures, introduced on foot of the Bacon Report, could percolate that rapidly. A second tranche of capital would shortly be in train to allow servicing of land for construction on up to 35,000 house sites. The first allocation of funding for servicing land would result in the building of 45,000 houses throughout the State, Mr Molloy added.
The Irish Auctioneers and Valuers' Institute says there has been no slackening in house price inflation.
Its analysis of the latest figures from the Department of the Environment, covering the second quarter of 1998, shows a 4.7 per cent increase in new houses across the State and a 10.6 per cent rise in Dublin.
The overall figures from January to June show a 22.3 per cent rise in new house prices nationally and an increase of 31.7 per cent in the capital.
In the second-hand house sector in the first half of 1998, the rate of increase was more striking. Prices were up by 32 per cent in the whole State and increased by 36.9 per cent in Dublin. This compared to a rise of just 14.9 per cent in the year to June 1997.
The leap in the second quarter is 11 per cent for the State - compared to just 2 per cent in the first quarter of the year. The hike in house prices was even more dramatic in Dublin - from 1.3 per cent in the first quarter to 13.3 per cent.
The institute's chief executive, Mr Alan Cooke, said the figures belied recent reports of slackening house price increases. First-time buyers could take little comfort from the statistics but, in the medium term, their position would be improved by the overall effect of the Bacon Report and the Finance No 2 Act 1998 enacted on foot of its findings.
Regrettably, however, rental levels had increased by 25 per cent on average in Dublin in the last 12 months, he said.
According to the IAVI, in the new home sector, where the Bacon Report was expected to have most impact, there was a "modest" reduction of 1.3 per cent in the capital growth rate in the first six months of this year compared with the first quarter. In Dublin, meanwhile, the rate of increase shot up by over 4 per cent in the same period.