A crash in the property market should not be regarded as a strong probability, and the Government should avoid tinkering and intervening for short-term reasons, an economics expert has warned.
Mr Moore McDowell, a senior lecturer in economics at UCD, told the Institute of Professional Auctioneers and Valuers (IPAV) annual general meeting in Carrick-on-Shannon that the Government should "recognise snake oil when it is offered to them".
"For example, the Department of the Environment should restrict its activity to freeing up land for development and lay off whoever thought up the social housing set-aside proposal," he said.
Infrastructure was the key to the supply side, not messing with development plans.
He disagreed with the new IPAV president, Mr Ray Finlay, who called for the removal of stamp duty on second-hand homes for first-time buyers. Mr McDowell said for a bubble to burst there first had to be a bubble. The evidence for a major bubble effect was weak and the predictions for economic growth were favourable.
"In short, there is no reason in my view why we should regard a crash in the property market as a strong probability," he said.
He said he believed the strong upwards movement in prices over the past decade, but in particular since 1996, could for the most part be satisfactorily explained by the so-called fundamentals. On the demand side these were income per head, immigration, labour force participation ratios, interest rates and relative prices. On the supply side they had the completion rate for new housing.
Major problems with housing will continue unless the planning process is turned on its head and a far more effective, streamlined system introduced, the newly elected president of the institute has said.
Mr Ray Finlay called on the Minister for the Environment and Local Government, Mr Dempsey, to set up a think-tank of interested parties - builders, developers, auctioneers, consumers, politicians, and environmentalists.
They would work to a specific deadline and put forward recommendations which would help to end the housing crisis once and for all.
Mr Finlay said everybody was familiar with the problems of planning and the different attitudes by local authorities. They needed consistency in planning. "There is enough land for houses for everyone, even in Dublin, but the rate at which planning permission is being given and serviced land provided is far too slow," he said.
Part of the solution was for the Government to give priority to decentralisation and the development of satellite towns around the capital.
One of the problems for first-time house buyers was the huge amount of revenue, 37 per cent, that the Government took from each sale. A measure to ease the burden would be to remove stamp duty on second-hand homes for first-time buyers.
It was estimated that its removal would cost approximately £50 million a year, hardly an insurmountable figure.