The Government is aiming to drive speculators from the housing market, help first-time buyers and prevent hoarding of land in its latest action plan for house prices. But the question is: will the measures work?
The supply measures will take time to do so. And many commentators believe that the tax measures may be counterproductive, warning that house prices and rents will rise.
First-time buyers will be pleased with reduction in stamp duty and the greater penalties for investors when buying homes, hoping that it will increase the supply of property on the market and lower prices.
The 2 per cent "speculators' tax" is also likely to be generally popular with the public. Measures to encourage greater supply through the setting up of specially zoned areas for house development also look promising. But the problems, as with all such proposals, are in the details and the way they work in a complex market.
One is that house prices are still going to rise rapidly. According to Dr Bacon, these are likely to double over the next five years. He has estimated that prices are likely to rise by 23 per cent this year and 21 per cent next year. Overall, over five years, the compounded rise is likely to be 100 per cent, even if many of the measures in his report are implemented.
If economic commentators are correct the increases could be even higher. Parts of the Government package introduced yesterday may serve to boost prices further.
According to John FitzGerald, research professor at the Economic and Social Research Institute, the measures introduced by the Minister for the Environment, Mr Dempsey, are almost all undesirable. Mr FitzGerald's concerns are broadly echoed by other commentators, including the Irish Auctioneers and Valuers Association.
He argues that there appears to be lack of clarity in the different outcomes the Government is trying to achieve. It wants to reduce house-price inflation and to help first-time buyers.
From an economic point of view, it also needs to see rents stabilise. Increases not only feed through to higher inflation figures but also make it more difficult to attract more workers from abroad and put further pressure on temporary accommodation and on housing lists.
Yesterday's measures do help first-time buyers. But the risk is that they will also increase prices and push up rents.
When the first report was published, hopes were high that the measures would tackle house-price inflation. Investors were targeted and tax incentives on residential investment properties were abolished. The reaction was swift: investors left the market, before returning as prices continued to soar, and landlords put rents up significantly.
The action taken last time is now widely viewed as misguided. Yet yesterday's report contained very similar measures.
Dr Bacon himself sought to draw a distinction between speculators, who, he said, are undesirable, and investors, who are not. But the proposals adopted by the Government do not really reflect this.
An across-the-board increase in stamp duty to 9 per cent for second and subsequent homes will certainly discourage investors from buying apartments, particularly at the lower end of the market, where the difference between the various rates of stamp duty is largest.
This will probably mean a greater proportion of first-time buyers rather than investors at the bottom end, which is the outcome Mr Dempsey wanted. But it will also mean that many investors will be dissuaded from buying city-centre apartments and other properties, which they would have rented out.
There is already excess demand in the rental sector, and the stamp duty changes are likely to make it worse. According to Dan McLaughlin, chief economist at ABN Amro, the big risk is that the rise in stamp duty will be passed on in higher rents.
According to the Irish Auctioneers and Valuers Institute, the proposal also undermines the work of the commission set up to report on the private rented residential sector. One of its terms of reference was to suggest incentives which would attract private investment, whereas the stamp duty measures are a serious disincentive, it notes.
According to Mr FitzGerald the Government ought to have targeted what he called "wasteful" building: holiday homes or other buildings which would lie empty for substantial periods, which make up about a quarter of output. Other buildings, whether owner-occupied or rented, provide much-needed homes.
It is also likely that the reduction in first-time buyers' stamp duty will be passed on by builders. Past experience with the first-time buyers' grants suggests it is simply reflected in greater profits for builders.
The reduction in stamp duty is likely to be no different, as first-time buyers bid up prices to a level that includes the amount they would have set aside for stamp duty.
In contrast the supply-side measures look more positive but will take two to three years to come into effect.
The Planning and Development Bill, 1999, has not yet passed, and planning will take nine to 14 months after a Government order. In addition the £3,000 penalty will not be introduced until the Finance Bill, 2001.
The improvements to social housing, with 1,000 additional units to be built a year and improvements in shared ownership, are also welcome.
After the initial reaction has died down the Government may well end up with almost as big a problem as it ever had. The hope has to be that the slowing down in prices continues and the market brings itself back to equilibrium.