Building activity would not cease because of the measures introduced by the Government to calm the house-buying market, according to the Minister for Finance.
Mr McCreevy said the publication of the Bacon report and the Government's speedy response would take much of the heat out of the market. It was hoped the package would "restore a degree of parity between the owner-occupier and the investor".
"The suggestion that building activity will cease because of these measures is unfounded. I have taken heart from recent media reports of sales of properties to owner-occupiers, where in previous schemes a significant percentage of the sales were made to investors. "This is evidence that there is sufficient demand for housing from those who wish to purchase as an owner-occupier. To suggest otherwise is to miss the point of the detailed analysis contained in the consultants' report."
Speaking during a second stage debate on the Finance Bill, Mr McCreevy said excessive house prices had potentially serious implications for the wider economy in terms of possible inflationary effects and the dangers of excessive personal borrowing.
The Government was not prepared to countenance the possible development of a situation where home ownership might be pushed beyond the reach of a significant proportion of households who reasonably aspired to it, he said. "The consultants' report has given clear recognition to these key priorities and the Government's package will help restore balance to the housing market," said Mr McCreevy. "This package will also help to remove another significant factor that has been fuelling price escalation, namely the expectation or - depending on one's perspective - fear of further major price increases."
Mr Pat Rabbitte (DL, Dublin South-West) said the extent of the profits being made by builders was at a level never before experienced. In the High Court this week, one young couple bought a house off the plans for £129,000, to be built in Tallaght. Three and a half months later they were advised by the builder that the cost of the house would now be £165,000 - a 28 per cent price rise.
"In my constituency experience, yesterday's decision in the High Court was not in respect of one house or one builder. That practice is widespread and Mr Justice McCracken and the Director of Consumer Affairs have since acknowledged this to be the case," he said. "It is straightforward opportunist profit-taking to such an excessive extent it ought to be outlawed."
He had been contacted by auctioneers who had stated that some deliberately set out to circumvent the normal provisions of contract law in terms of the manner in which they construct the paperwork for the taking of deposits or booking fees. "If the Minister offers to sell me his house at a certain consideration and I accept that, there is normally a contract if I pay a deposit, which is usually capable of being enforced in the courts.
"However, in this case the auctioneers set out in writing to expressly exclude the existence of a contract by indicating the booking fee was no more than an indication of interest. The Minister cannot permit that situation to continue as it is intolerable."
Mr Derek McDowell (Lab, Dublin North-Central) said in the six months since the Bacon report was commissioned, house prices in Dublin had risen by nearly 20 per cent.