Gazumping in the housing market would be made illegal under a private member's Bill introduced by Mr Brian Hayes (FG, Dublin South West).

Mr Hayes said his Bill would prevent vendors of residential property who had agreed to sell a property at a certain price, and had then received a booking deposit, selling it to another party for an increased price. There would be a fine not greater than £5,000 for a first offence and imprisonment for a term not exceeding one year for a second or subsequent offence.

A feature of the legislation, said Mr Hayes, was the power given to the courts to grant compensation to a "gazumped" purchaser of not more than 10 times the booking deposit or £10,000, whichever was the greater. The Bill placed a duty on vendors to deliver to purchasers a written contract within 14 days of receipt of a booking deposit.

Introducing the Home Purchasers Anti-Gazumping Bill, Mr Hayes said his party believed that the most pressing concern currently facing Irish society was the crisis in the housing market. It was having a devastating affect on the ability of the State to provide decent and affordable accommodation.

"It is one of the most pathetic outcomes of the Celtic Tiger that an entire generation of Irish families cannot satisfy one of the most basic aspirations within this society, namely the aspiration to purchase a home."

He said that as a result of hyperinflation in the market, the cost of purchasing a house in Dublin had risen by more than 103 per cent during the past 4 1/2 years. A new house in the Dublin area cost £60,000 in 1993. By the end of the second quarter of this year, the equivalent home cost a "staggering" £122,000.

The average increase during this period throughout the State was 73 per cent, said Mr Hayes.

The Minister of State for the Environment, Mr Bobby Molloy, said the Bill did not provide a solution to the problem of gazumping. Its basic approach was seriously defective from a legal standpoint and it was not capable of being amended to provide a sensible solution because of the extent of its constitutional and practical difficulties.

He said that following the publication of the Bacon Report and the launch of the Government's programme on house prices, he had raised the question of formulating a code of practice to deal with undesirable market practices with the Irish Home Builders Association.

He was glad to say that the response of the association had been very positive.

He understood that the association would propose a code of practice which enshrined the principle that where a booking deposit had been made for the purchase of a house at a particular price, the transaction should, subject to appropriate conditions and requirements being satisfied, proceed to conclusion on that basis.

Mr Molloy said that while the association's proposals would have to be carefully considered when finalised, he was very hopeful that there would be a successful conclusion and he would continue to press for the finalisation of the code of practice as soon as possible.