The Minister of State for Housing has criticised banks and property speculators whose activities he claims are pushing the Republic towards the "inter-generational mortgage".
These are very long-term mortgages taken out by a member of one generation, such as a parent, and paid off by a succeeding generation, such as a son or daughter.
Predicting that the number of completed new homes would be in the region of 90,000 this year, Noel Ahern said it was disappointing that house prices continued to rise despite the 13th successive year of record housing output.
He said property speculators buying off the plans and selling on their interest before exchange of contracts was fuelling price inflation. He doubted if all such speculators were paying full rates of tax on their profits.
Mr Ahern also said he was "critical of financial institutions which just look upon ways to increase their market share. When I was young - not that long ago - there were 20- or 25-year mortgages, now there are 35- and 40-year and interest-only mortgages and some bods in the sector are talking about inter-generational mortgages."
These are taken out for up to 50 years in some European countries and even 100 years in Japan, allowing homeowners to borrow larger amounts, with lower monthly repayments over longer periods.
Mr Ahern said house prices had calmed before "new gimmicks" were introduced by the financial institutions and he was not happy with the results.
Mr Ahern also appeared to rule out any new reliefs on stamp duty for first-time buyers, pointing out that new homes up to a price of €177,000 "which are not haciendas" were already exempt.
He was also concerned that it was not possible to guarantee any savings made as a result of stamp-duty cuts would be passed on to first-time buyers. Mr Ahern said such cuts might, in fact, continue to fuel house price inflation.
He would raise the issue of speculators with the Minister for Finance in the preparation of the next budget to see if measures could be brought in to curb their activity.
Welcoming the figures on completed new homes, Mr Ahern said the numbers of first-time ESB connections in the first seven months of the year were up by 23.6 per cent on the same time last year.
He did not expect the level of increase to be borne out until the end of the year but he said a rise in the order of 10 per cent was probable. This would be result in 90,000 new homes, he said.
While house price inflation was worrying, the booming economy was also responsible. Mr Ahern said he was also pleased to see a rise in the number of immigrants buying new homes. This was proof that not all immigrants were on wage rates that were exploitive and "are people doing well for themselves".
Labour spokesman on the environment Éamon Gilmore said that while the new houses were welcome, the Government had failed to deliver on social and affordable housing.
Mr Gilmore said that under the 2003 Sustaining Progress Partnership Agreement, 10,000 homes were to be built, "but up to March of this year, only 1,932 had actually been completed".
