The Construction Industry Federation (CIF) has urged the Government to act now to restore confidence in the housing market, facilitate the retention of investment in Ireland and secure additional revenues for the State.

Launching the CIF's annual 'Construction Review', Federation President Hank Fogarty called for a "radical reform of stamp duty and mortgage interest relief to bring stability to the Irish housing market and a renewed commitment to the National Development Plan, as the bedrock of growing the capacity of the Irish economy."

On the housing market, Mr Fogarty stated: "While the medium-term requirement is for 65,000 houses annually, the market has stalled as a result of negative sentiment. On the supply side activity levels have fallen significantly and the prospects are that as low as 25,000 units will be built during the first six months of the year. It is imperative, therefore, that confidence be restored sooner rather than later so that a serious shortfall in housing completion numbers does not arise in key growth areas. The priority for Government should be to achieve equilibrium in the market at the medium-term level."

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Mr Fogarty also went on to urge the Government to take action to restore the required level of confidence, including a reduction in the penal top rate of stamp duty from nine per cent to five per cent, together with an increase in mortgage interest relief for first time buyers.

"The time is now right for a radical review of stamp duty. Mobility within the housing market is significantly reduced and this will have a negative impact on overall economic activity and employment and exchequer receipts," he said. "With renewed confidence, housing starts and completions will rapidly return to the medium-term requirement."

He continued: "Ireland’s ability to compete effectively at the upper end of the global economy is inextricably bound up with the quality of its public infrastructure.

"The quality of public and private transportation, education, health, water and waste water, waste management, energy and environmental infrastructure impact national competitiveness and must be a priority to the Government."

(JM)