The number of family homes being built in Dublin needs to treble in order to meet pent-up demand, Transport Minister Leo Varadkar has said.
Mr Varadkar said the Government was likely to introduce further measures to stimulate the construction sector.
But he said that housing supply must increase significantly, particularly in the Dublin area, in order to avoid a massive supply shortage.
The Government is seeking foreign investors to finance the building of badly needed family-home developments in the capital to ease chronic shortages, the ‘Sunday Independent’ revealed yesterday.
The Coalition wants to move away from the building of ‘shoebox’ apartments.
The planning system will also be made less restrictive.
The lack of supply of new housing for families in Dublin is creating a bubble in the market, with the demand pushing up prices dramatically.
The Coalition also believes the level of activity in the construction sector is too low, given the demands for accommodation in the market.
Government officials met for the second time last week with economists and experts on the property market.
The Coalition will publish a special plan for the construction industry in February.
“We want to get construction back to a sustainable level. There was an over-correction.
“We are going to need more housing supply. I heard John Fitzgerald from the ESRI saying we’ll need to treble the housing supply in Dublin area,” Mr Varadkar said.
He said the Government was to follow up the reduced VAT rate for homeowners who undertake over €5,000 worth of renovations.
“People can get the VAT back on improvements done on their homes, and there is likely going to be a few other things.”
But he ruled out any “property-based tax incentives”, which he said helped the country get into the mess it is in.
“We have to be careful not to introduce any incentives that would over stimulate the construction sector.”