The author of the Bacon report on house prices has said that higher housing densities and the use of tax designation are vital issues in dampening down the property market.
Meanwhile, Mr Pat O'Reilly, the managing director of the State's biggest building society, EBS, has called for subsidies for first-time buyers to be introduced in the Budget.
Dr Peter Bacon said the Government "is going in the right direction" by introducing its recent package of measures, but he said the issue of housing density and tax designation "may need to be looked at further".
He was speaking to The Irish Times after addressing a Foundation for Fiscal Studies annual conference on The Fiscal Treatment of Housing in Dublin.
Higher residential densities - allowing more houses to be built on each acre - would greatly increase the availability of housing, particularly in the Dublin area, he said.
"Dublin now has the same GNP as many other European capitals, so I do not see why the density of housing should be any different here," he said. He said the Minister for the Environment, Mr Dempsey, was empowered under the planning acts to issue a directive on housing density to local authorities and if this was implemented, it could mean 30 per cent more units on an average section of zoned land.
"While some people believe directives are a crude way to go, I think there is a process going on in official circles on this issue of densities at present," he said.
He said one factor holding back policy to deal with house prices was the lack of consensus on how quickly the changes in densities would "come on stream".
He said changing the densities within local authority areas was generally a quicker way to deal with the housing problem than large scale re-zonings, although these may be necessary too.
Mr Dempsey has issued guidelines to local authorities on the issue of densities, but a spokesman said yesterday there were currently no plans for Mr Dempsey to issue a directive to them on the issue.
Mr Bacon said the other issue which should be debated was the use of tax designation as a way to encourage commercial development in previously neglected areas. "The question has to be asked: `Is it a good idea that we provide tax incentives for commercial development often above housing when the need for housing is far more pressing?'," he said. Speaking at the same conference, Mr O'Reilly said the Government should "provide further assistance to hard pressed first-time buyers" in the forthcoming budget.
He said this could be achieved by "refocusing tax breaks and incentives to provide interest rate subsidies in the early years of a home loan". "Combined with expected lower interest rates, this subsidy could restore affordability to a large number of young people currently excluded from the housing market," he said.
Mr Blair Horan, the general secretary of the Civil and Public Service Union, speaking from the audience, said while he saw merits in the proposal, he worried that builders would simply "cream off the additional subsidies".
Mr O'Reilly said this might happen but was unlikely if the subsidies were spread over several years.
Another proposal the Government might consider, said Mr O'Reilly, was compulsory procurement where already zoned land, urgently needed for housing, was not being released to the market. "There are already powers to procure land to build roads and bridges; the provision of homes is no less important," he said.
He said the evidence in the EBS is that the measures arising from the Bacon report had failed to stop escalating prices, although they had "eased demand pressure in the short term". He said the measures would not increase the supply of land and this was "the root of the problem".
The managing director of Sherry Fitzgerald, Mr Mark Fitzgerald, said the Bacon report has slowed house price increases, but only temporarily. He suggested a major decentralisation programme be undertaken so that cities like Cork, Waterford and Limerick were seriously developed and "some of the pressure is taken off Dublin".
