There has been a "calming" in house prices in recent months, and there is evidence that investors are leaving the starter home market, the Minister for the Environment, has said.
"Overall, there has been a calming of the market, and the extra serviced land initiative will feed into this further down the line. There has been a definite slow down in the July-September quarter," Mr Dempsey said yesterday.
All the indications from his own figures, and from outside agencies such as building societies, were showing house-price inflation had "decelerated significantly" in the past few months.
He said it now appeared that the initiatives taken after the Bacon Report to combat increasing prices were working and were taking investors out of the equation. The Minister of State for Housing and Urban Renewal, Mr Robert Molloy, supported this view and said the measures taken by the Government since April were now having an effect. They were increasing infrastructure to open up land for the building of more houses. They were also ensuring that staff was increased in planning departments and in Bord Pleanala.
The withdrawal of tax incentives from investors had returned the initiative to first-time house-buyers. Because of the demand, he believed, there would be need for about 400,000 houses in the next 10 years. Dramatic action had been taken to deal with this, and it was something that would be kept under constant review.
There is to be a special allocation of £15 million for water/ waste-water service projects and £3 million for non-national roads development to increase the supply of serviced land for housing development. Over 100,000 new housing sites will be developed as a result of the initiative. This is expected to secure increased housing output and to moderate house-price inflation.
The Ministers were speaking at a press briefing about the 1999 estimates for their Department which show an increase of £176 million for capital investment in roads, water supply, sewage treatment and social housing. They said total expenditure on housing would exceed £521 million in 1999, an increase of 15 per cent.
Local authority and social housing programmes were being provided with £269 million, up £45 million on 1998. This money was to meet existing commitments on the local authority housing programme, as well as facilitating 600 extra starts or acquisitions. They accepted that the large waiting list for local authority housing was a matter of concern.