McCreevy accused of playing politics with construction industry while calming public

"Plugging holes but causing floods," was how a Cork builder, Mr Declan O'Mahony, summed up Mr McCreevy's measures.

"Plugging holes but causing floods," was how a Cork builder, Mr Declan O'Mahony, summed up Mr McCreevy's measures.

Mr O'Mahony, a director of Brideview Developments and chairman of the Construction Federation in Cork, said the Minister appeared to be playing politics with the construction industry and attempting to calm public unease about house prices.

Mr O'Mahony predicted that for the fourth quarter of this year, the construction of new houses would show a decline of up to 20 per cent. He believed the reason could be laid squarely at the Government's door.

The third Bacon report had effectively killed the market with the imposition of stamp duty of 9 per cent on second-time purchasers. Investors were looking outside the Irish market in substantial numbers. There was a huge outflow of funds to southern Spain, Northern Ireland and Scotland.

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"I think it was a very negative Budget and we can see lots of problems down the road for the industry. The Minister spent about three minutes during his speech on the construction sector and gave nothing to reassure us that things are going to improve.

"The fact is that the supply side of the industry, namely the builders, don't know where they stand on the planning legislation, which requires them to set aside 20 per cent of building land for social and affordable housing. This has put a stop to builders' certainty as to how this provision is going to be implemented.

"In turn, lack of investment by builders in land will mean a shortage of housing and in the long term prices will go up and not down, as the Government seems to be indicating," he said.

On the rented property side, Mr O'Mahony said the Minister had decided to defer a growing crisis in that sector by announcing that he would wait for a review of the rental market.

Effectively, he had put the problem on the long finger and appeared to be ignoring the fact that the problem in towns and cities all over the State was getting worse.