CIF: Govt 'must act' to restore confidence in housing market

Mr Fogarty also called for a renewed commitment to the National Development Plan.

Mr Fogarty said: "While the medium-term requirement is for 65,000 houses annually, the market has stalled as a result of negative sentiment. On the supply side activity levels have fallen significantly and the prospects are that as low as 25,000 units will be built during the first six months of the year.

"It is imperative, therefore, that confidence be restored sooner rather than later so that a serious shortfall in housing completion numbers does not arise in key growth areas. The priority for Government should be to achieve equilibrium in the market at the medium-term level."

The CIF president said that the Government needed to reduce the penal top rate of stamp duty from 9% to 5% and increase mortgage interest relief for first-time buyers over and above what is already committed to by Government.

"In addition, investor rates of stamp duty in the new homes market must be reviewed downwards so as to promote investment in the domestic Irish market rather than facilitating export of our investments abroad," said Mr Fogarty.

"The time is now right for a radical review of stamp duty. Mobility within the housing market is significantly reduced and this will have a negative impact on overall economic activity and employment and exchequer receipts. With renewed confidence, housing starts and completions will rapidly return to the medium term requirement."

Ireland’s ability to compete effectively at the upper end of the global economy is "inextricably bound up with the quality of its public infrastructure". This included: "The quality of public and private transportation, education, health, water and waste water, waste management, energy and environmental infrastructure impact national competitiveness" and Mr Fogarty said it must be a priority for Government.

"There can be no diversion from commitments on capital expenditure, and, if required, Government must borrow and borrow up to the limits permitted by the Stability and Growth Pact to fund infrastructure development planning."

He said, in order to achieve optimum efficiencies from Government expenditure, "there is a need also to tackle implementation bottlenecks which cut across departmental or local authority boundaries".

"In areas such as public transportation, water and waste water services and waste management, there is a need for single agency responsibility and for such agencies to be given appropriate executive and financial powers."