Proposals for a €50 million housing project, outside Letterkenny, are expected to be submitted to the planning authority this weeks, according to reports.

The plans include 204 houses and apartments, cycle paths and public spaces, all located on a 22-acre Killyclug site.

Developer P and C McGettigan's move has been seen as an investment of confidence in the area, amid trouble in the housing market and the continuing economic slump.

Work is expected to begin as early as next year.

Conor McGettigan said, although times are tough, in the present economic climate, his firm is looking at the "bigger picture", which he predicts is "bright and optimistic".

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Mr McGettigan has noted the impact of the ongoing credit squeeze, and subsequent shortage of 100% home loans.

"People's wages haven't changed or altered this past few months. What has happened is that financial institutions have tightened their belts and they are looking at a strict set criteria before lending money.

"Not too long ago they were handing out 100% loans but now a lot of young, professional, people are finding it difficult to secure a loan to buy a house.

"The banks and building societies will have to come round full circle. They have to keep lending money to businesses and young people - that's what makes the economy grow," he added.

The developer has already undertaken extensive work in the Hunters Wood and Solomon's housing projects

The firm's latest proposals consist of 204 residential dwellings, comprising of two and three bed two-storey terraced units, two-bed apartments, two-storey semi detached and detached houses, town houses and four apartment blocks.

The development will also encompass a two-storey crèche providing 55 full time childcare spaces and a total of 375 parking spaces.

A new entrance from the public road will service the development.

(PR/JM)