New house price curbs possible, says Dempsey

The minister for the Environment has warned that the Government may introduce tough measures to curb house prices.

Mr Dempsey told the Fianna Fail Ardfheis last night that an undesirable by-product of the surging economy had been the upward spiral in house prices. "We will be closely monitoring the situation in the next few months and if further strong measures are required, this Government will not flinch from its responsibility."

He said that the Government had commissioned the Bacon report and quickly implemented its recommendations. Inflationary pressures had started to ease through the full effects of the action taken. But it would take some more time to work through the market, he added.

Mr Dempsey said that the Government's policy-driven approach had led to a comprehensive strategy which was dealing with the problem. The action on the house prices initiative involved a three-pronged approach: to increase the supply of housing, address factors that caused over-heating or distortions in the market, and improve the position of first-time buyers.

He said that a major study carried out by the National Roads Authority had calculated that bringing our roads up to scratch over the next 20 years would cost over £6 billion. About £2.4 billion would be needed for water supply and waste water infrastructure.

"It is easy to see, therefore, the imperative of increasing State investment in tackling this deficit which, if left unaddressed, would seriously hamper our ability to keep the economy on a steady, consistent growth path."

Mr Dempsey said that the infrastructural deficit was uppermost in the Government's mindset when determining its approach to the next round of EU funding and spending estimates for next year. The State next year would spend an additional £176 million on roads, housing and water services, bringing the total figure to £814 million.

Investment in national roads would rise by £48 million, while funding existing projects would allow for a number of major new schemes, including the Drogheda by-pass.