The issue surrounding the housing situation was fundamentally one of demand, Minister of State for the Environment Noel Ahern said.
"The economy and credit are booming. We are trying to meet strong demand and the only way to do so is to tackle supply. At the same time, we are not losing sight of those who are being squeezed out of the market."
Mr Ahern said that in north Dublin, affordable houses were being sold for €165,000, while houses built in Clondalkin and Tallaght, as part of a land swap for property in Harcourt Terrace, were being sold for €142,000 for a two-bedroom property and €172,000 for a three-bedroom property. "Houses are being provided at affordable prices. The fundamental issue is to meet demand and we are doing everything in our power to encourage developers to increase supply."
Mr Ahern was replying to Labour environment spokesman Eamon Gilmore, who said that while there was some degree of moderation in the level of house price increases, house price inflation appeared to be taking off again. "That was the general thrust of the ESRI and Permanent TSB report earlier this year," he said.
Mr Ahern said that last year was the opposite to the previous year, where from early on, in a quarterly basis, the rate of increase declined.
"This time last year, experts were talking about a 5 per cent or 6 per cent increase. It seemed, however, that another wave of increases took place as the year went on."
He added that the Government's policy in recent years had been to encourage supply because only by having supply to meet demand could the problem be solved.
"We are doing everything to maximise supply while putting schemes in place to help those caught in the affordability gap."
Mr Gilmore said that of the 80,000 houses built last year, half of them were bought by investors and 15,000 of them were second homes. Even in a year where the level of supply increased so much, house prices surged again, he added.
