Irish Minister for Housing and Urban Renewal, Noel Ahern, has called upon the government to introduce measures to curb speculation in the country's property market, within which prices continue to rise apace.
Commenting on the release by his government department of new house completion figures for the first seven months of the year, Ahern urged Finance Minister Brian Cowen to consider the issue of Ireland's runaway property market when he presents his 2007 Budget.
Although Ahern, who is brother of Prime Minister Bertie Ahern, did not give specific details of measures he would like to see introduced, it is thought they could involve the reintroduction of taxes on properties which are rented out, and higher stamp duty on investment properties.
However, Minister Ahern made it clear that tough measures should be directed towards investors who snap up property prior to completion with the sole intent of keeping it off the market until its value increases.
“The person that I wish I could get rid of is the individual, company or whatever who is just buying off-the-plans and off-loading it in 18 months’ time,” Mr Ahern said in a report by the Irish Examiner.
Despite the fact that there was a 24% increase in the amount of new house completions in the first seven months of 2006 compared to the same period last year, prices continue to soar, and most first time buyers struggle to get a foothold on the market in Ireland.
According to data released Tuesday by the Economic & Social Research Institute think-tank, and mortgage lender Permanent TSB, Irish house prices rose 9.1% year-on-year in the seven months to the end of July 2006, almost three times the rate recorded during the same period in 2005.
Overall, prices have risen by about 10% per year on average since 2000, prompting a recent warning from the International Monetary Fund that the Irish housing markets risks becoming "overvalued".
According to the IMF, if eurozone interests rise faster than expected over the coming months, a "sharp correction" in Ireland's housing market cannot be discounted.
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