The Government is to aid the building of 40,000 new houses and apartments over the next three years by spending £15 million on servicing sites. Local authorities will provide another £20 million. However, the Green Party said the benefits could go to developers rather than buyers.
The £35 million will be spent on developing water and sewerage services for idle land already zoned residential. This will enable quicker development. Local authorities will rezone more land for housing in their development plans, which are now being drawn up.
The Government, saying it is concerned about high house prices, has already commissioned Peter Bacon and Associates to carry out an analysis of house prices and prepare a report within three months.
The Department of the Environment hopes the action of the local authorities will go some way towards easing the State's escalating house prices problem, particularly for first-time buyers.
Proposals are being drawn up for the development of specific publicly and privately-owned sites in their areas which local authorities feel are suitable for the construction of private and public housing. The proposals will be put to tender, so private developers can build and sell on to members of the public.
The Green Party's criticism of the plan was voiced by its spokesman on finance and social welfare, Cllr Dan Boyle, Cork South-Central, who said the government's action may contain some risk that the "wrong people may benefit."
He felt there was a compelling case for the introduction of price controls for housing. Housing developers had increased their average profit margin on the sale of houses from 8 per cent in the early part of this decade to the present level of about 15 per cent.
"The Government needs to address why current financial incentives have not stemmed houseprice inflation, and how in fact many developers have cynically added the value of these incentives to house prices, giving little or no benefit to first-time buyers. "Any programme to tackle growing house-price inflation must be weighed towards encouraging developments in towns and villages other and distant from our larger cities, in particular Dublin, to prevent the gridlock of urban sprawl that is choking our cities."
The Irish Auctioneers and Valuers Institute (IAVI), reports that during 1997 Dublin house prices rose by about 25 per cent and values increased throughout the State by 17 per cent, according to a survey of 500 auctioneers.
IAVI members say property values rose in virtually every sector of the market last year. The most spectacular increases were in housing land, particularly in Dublin apartment sites, which jumped by about 28 per cent.
The £2.9 million paid for four acres in Lucan set a new record for apartment land.
Prices of new houses in Dublin rose by close to 20 per cent. The average price of a new house in the capital is now £96,000, up from £76,439 in 1996. It is predicted that the average price will rise to £100,000 in the near future. The increases are not confined to Dublin; house prices rose by about 14 per cent throughout the State.