Casey's conclusion means that up to eight years in the life of a normal 25 year mortgage now goes to pay for the excess in the price of the site.

Labour Party TD Eamon Gilmore said in a Dáil Éireann debate in October 2003 that Casey's assessment is consistent with the information published by the Department of the Environment, Heritage and Local Government. The Housing Statistics Bulletin, which is published quarterly by the Department, compares indices for private new house prices, consumer prices, the average earnings of adult workers and house building costs. Throughout the first half of the 1990s all four indices were virtually identical. Based on a 1991 index of 100, in the respective 1995 indices private new house prices stood at 116, average earnings of adult workers stood at 116, house building costs stood at 114 and the CPI stood at 111.

By 2002, all four indices had widened somewhat, but consumer prices, average earnings and house building costs remained reasonably in touch. CPI stood at 139, average earnings stood at 163, house building costs at 170, however, the price of houses index had shot up to 296. This was 126 points more than the house building cost index.

Gilmore says that there is no shortage of enabling provisions to equip local authorities to take a proactive role in the planning and development of their areas, including the acquisition and development of land banks, either by themselves or in partnership with commercial developers, and in accordance with the provisions of a coherent overall plan rather than by considering planning applications submitted on a piecemeal basis. 

Planning and Supply Restrictions

Two-thirds of farm income is paid by European taxpayers and landowners can also avail of the current rezoning system, also at the expense of taxpayers.

Supply issues are important and rather than piecemeal rezoning, which artificially restricts supply, more intelligent rezoning linked to spatial and development plans would increase the supply.

The smaller space allocations for new houses in Ireland, compared with other countries, are not for example justified by a shortage of developable land. In Ireland, approximately 4 percent of land is covered by urban development, while 8 percent is developed in England and Wales (approximately 6 percent in the UK). This compares to 12 percent in France and 28 percent in the Netherlands. Urban development the New World countries covers less land, from approximately 0.3 percent in Australia to 2.6 percent in the United States.

The OECD said last year that in the UK, complex and inefficient local zoning regulations and a slow authorisation process are among the reasons for the rigidity of housing supply, underlying both the trend rise of house prices and their high variability. In Ireland and the Netherlands similar factors affect house price dynamics. In Korea, government limitations on urban land supply (Restricted Development Zone) have been important causes of the rapid rise in housing prices. Heavy land-use regulations in some US metropolitan areas have been associated with considerably lower levels of new housing construction, which have restricted housing supply and thus increased house prices in the regulated municipalities as well as in neighbouring towns.

It is surely bizarre that prime office rents in Dublin are double those in Amsterdam or that a relatively small shopping street in Dublin - Grafton Street - would be amongst the most expensive for retail rents in the world.

Two years ago the River Island store sold for €50 million.

The Grafton Street rent per square meter of €3,653 ($4,423) compares with €1,500 ($1,816) in the main shopping area in Helsinki, capital of economically vibrant Finland and €1.250 ($1,513) in Rue Neuve in Brussels, the capital of the European Union.

Some cities in the US have grown significantly in population in the past decade without having a house price bubble while in others prices have surged because of planning restrictions.

In 2005, a realtor Coldwell Banker published a survey of prices of a 2,200-square-foot house with 4 bedrooms, 2 1/2 bathrooms, a family room and a two-car garage. The neighborhood - a more subjective measure - is one "typical for corporate middle-management transferees," and compared several US cities.

The price in Houston, Texas - not exactly an economic backwater - is $152,000; in Portland, Oregon $305,000 and Colorado Springs $212,000. 

The average price paid for a new Irish house in November 2005 was €271,016 ($328,000), while that paid for a second hand house was €280,786. The average price paid for a house in Dublin in November 2005 was €365,562 ($443,000).

The average house price in Scotland was £117,626 (€172,000; $208,000), according to official figures published in November 2005. The average price in Edinburgh was £178,078 (€260,000; $314,560)

Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said: "The underlying economic environment remains benign. Unemployment remains at the lowest level for 30 years, accompanied by robust levels of increase of retail sales and continuing high levels of consumer confidence."

US houses on average are about double the size of Irish and UK houses.

Randal O'Toole a US economist writes: Homebuilders are able to meet the demand for new housing, even in rapidly growing areas, unless something stands in their way. During the 1990s, the Atlanta, Dallas, Houston, and Phoenix urban areas were among the fastest-developing in America, all growing by 900,000 people or more. Houston has no zoning at all, and while the other cities have zoning, it is aimed strictly at protecting the status quo in existing neighborhoods, not at controlling new development. Homebuilders easily kept up with demand, and housing prices in these regions grew by about 3–4% per year, or slightly faster than the rate of inflation. By comparison, an urban-growth boundary, design codes, and other development restrictions caused home prices in slower-growing Portland, Ore. to increase faster than 7% per year in the 1990s.

In 2001, the Irish State agency, the National Roads Authority (NRA), said in relation to a campaign for an increase in compensation for land acquired by Compulsory Purchase Order, that was led by Tom Parlon, then President of the Irish Farmers Association (IFA) and now Junior Minister for Finance, in the Irish Government, that pronouncements by senior IFA officials, including Parlon, had claimed that:

• the State, through the actions of local authorities, has no right to appropriate farmland;
• the compulsory acquisition of farmland for the national roads building programme is unjust, inequitable and seriously damages the livelihood and viability of 8,000 farm families;
• CPO legislation is outdated and compensation paid to farmers is inadequate;
• compensation should be paid at development land prices given the intended use of land for road schemes and not at market value for agriculture land;
• land adjoining motorways/dual carriageways will have no development potential because of access restrictions, and
• significant cost increases have occurred over the last two years in raw materials for road construction and consultants fees, while farmers have not benefited to the same extent in relation to land prices.

By December 2001, the IFA had forced the Irish Government to agree to a fixed goodwill payment of €5,000 per acre, relating to the facilitation of access to land, in addition to compensation payable in respect of property acquired.

In July 2003, an inter-agency submission on Economic Infrastructure for National Competitiveness, said that the presence of an infrastructural development can bestow considerable ‘hope value’ on a piece of land. This has the potential to encourage private speculation, which can stifle social development. It said that the normal principle for compensation in litigation is to put a party back into the position in which they were prior to the events giving rise to the litigation taking place. Similarly, the enforced procurement of land should be at prices based upon a fair-value rather than a speculative-value. This would limit hedging and restrain the excessive rate of land price growth witnessed in recent years.

Meanwhile the farmers' leader had joined the Progressive Democrats (PDs), the junior party in the Irish coalition Government in return for a guarantee that he would appointed a Minister if the outgoing government was returned to power, in 2002.

Parlon as a Minister of State has said that any tampering with the existing system of determining land prices for development, would be a form of Stalinism.

It surely is a bizarre system of "free enterprise" that the PDs claim to support, where State funds provide Parlon and his farmer colleagues with most of their income and when they sell land, the average taxpayer is also screwed.

Nevertheless, Parlon claims to put "competition and enterprise at the heart of the Irish economy."

A bank manger told me recently about a farmer who made €9 million from the sale of about 30 acres of land. The farmer bought several houses and has become a landlord.

However, Parlon has evoked the old landlord system by warning of a "jump back to the dark days of the 19th century."

Extract from Parlon's speech at the Parnell Summer School, Aug 2003:

The provision of quality affordable housing to all citizens is the ultimate goal that the State wants to achieve, and I fully support that. But I believe that weakening private property rights as a means to achieve this goal would be a great mistake.

Such an approach is gift-wrapped in an ideology somewhere left of Stalin, which has no place in a modern dynamic open economy like Ireland.

Any measure giving the State the power to control the value of private assets would have major negative ramifications for thousands of property owners and would be a jump back to the dark days of the 19th century.

What if your home, your business or your farm is zoned for development? Should you be allow reap the benefits of this? In a democracy of course you should.

The practical implementation of such a measure would be hugely inequitable and would end up taking the value of the land off the property owner and passing it on to the eventual owners of houses on the site.

It took centuries for Irish politicians to establish property rights and any move to change that would be a slight on the memory of people like Charles Stewart Parnell.

My party, the Progressive Democrats have worked hard since our foundation 18 years ago to put competition and enterprise at the heart of the Irish economy and a move like this would be regressive for Ireland.

Conclusion

The Irish Constitution is often conveniently claimed to be a barrier to reforming the development land issue. Parlon and his farmer friends are not the only ones with a self-interest in maintaining the status quo. Many who get on the property ladder perceive a self-interest also to have property prices on a continuous upward path. So the self-interest of politicians is to avoid upsetting the property applecart.

A public planning tribunal has revealed significant corruption in rezoning land and politicians willing to sell any integrity they may have had, for as low as €2,000.

However, in the current loadsofmoney culture that dominates Irish life, issues such as the impact of the property system on competitiveness in say ten years time or the encouragement of corruption similar to the illicit drugs trade, are a niche concern.

As the renowned British economist John Maynard Keynes onetime caustically remarked: We are all dead in the long run.

Property Prices by US City 2005

a 2,200-square-foot house with 4 bedrooms, 2 1/2 bathrooms, a family room and a two-car garage 

State of Market	Name of Market	Avg Sales Price, 2005
Alabama
AL	Huntsville	$194,466.00
Alaska
AK	Anchorage	$305,107.00
AK	Juneau	$443,000.00
Arkansas
AR	Fort Smith	$170,750.00
AR	Little Rock	$181,395.00
AR	Fayetteville	$227,050.00
Arizona
AZ	Mesa	$248,666.00
AZ	Tucson	$250,833.00
AZ	Phoenix	$293,334.00
AZ	Flagstaff	$425,000.00
AZ	Scottsdale	$478,833.00
California
CA	Fresno	$389,458.00
CA	Bakersfield	$407,875.00
CA	Grass Valley	$426,275.00
CA	Riverside / Ontario	$459,133.00
CA	Modesto	$473,000.00
CA	Palm Desert	$507,750.00
CA	Sacramento	$517,975.00
CA	Santa Maria	$605,350.00
CA	Santa Clarita	$608,875.00
CA	San Diego	$627,938.00
CA	Davis	$661,875.00
CA	Rancho Bernardo	$683,333.00
CA	Napa	$725,480.00
CA	Encinitas	$768,250.00
CA	Santa Rosa	$770,000.00
CA	Pasadena	$788,200.00
CA	Monterey Peninsula	$831,250.00
CA	Walnut Creek	$835,750.00
CA	Mission Viejo	$852,313.00
CA	San Rafael	$859,000.00
CA	Irvine	$869,125.00
CA	Pleasanton	$880,333.00
CA	Santa Cruz	$885,546.00
CA	Fremont	$898,750.00
CA	Long Beach	$920,844.00
CA	Thousand Oaks	$963,375.00
CA	Oakland / Montclair	$1,100,000.00
CA	Palos Verdes	$1,239,500.00
CA	San Jose	$1,272,625.00
CA	San Francisco	$1,300,000.00
CA	San Mateo	$1,334,425.00
CA	Newport Beach	$1,499,000.00
CA	Palo Alto	$1,550,000.00
CA	Santa Barbara	$1,603,750.00
CA	Beverly Hills	$1,656,500.00
CA	Santa Monica	$1,766,666.00
CA	La Jolla	$1,875,000.00
Colorado
CO	Colorado Springs	$211,667.00
CO	Fort Collins	$266,417.00
CO	Denver	$336,433.00
CO	Highlands Ranch	$354,500.00
CO	Boulder	$546,350.00
Connecticut
CT	Torrington	$233,331.00
CT	Naugatuck	$351,494.00
CT	West Hartford	$366,125.00
CT	Old Lyme	$492,125.00
CT	Danbury	$532,400.00
CT	Ridgefield	$735,000.00
CT	Fairfield	$737,738.00
CT	Greenwich	$1,267,500.00
Washington, D.C.
DC	Washington	$727,250.00
Delaware
DE	Wilmington	$377,250.00
Florida
FL	Pensacola	$222,258.00
FL	Gainesville	$259,950.00
FL	Jacksonville	$290,778.00
FL	Tallahassee	$296,191.00
FL	Port Charlotte	$310,164.00
FL	Orlando	$312,000.00
FL	Tampa	$320,781.00
FL	Clearwater / St. Petersburg	$323,833.00
FL	Daytona Beach	$349,650.00
FL	Panama City	$360,333.00
FL	Ft. Myers	$385,483.00
FL	Ft. Lauderdale / Coral Springs	$387,141.00
FL	Sarasota	$387,375.00
FL	West Palm Beach	$429,250.00
FL	Naples	$436,666.00
FL	Boca Raton	$521,412.00
FL	Miami / Coral Gables	$671,854.00
FL	Key West	$949,375.00
Georgia
GA	Macon	$167,850.00
GA	Dalton	$182,750.00
GA	Columbus	$217,818.00
GA	Athens	$230,152.00
GA	Savannah	$247,375.00
GA	Atlanta	$303,000.00
Hawaii
HI	Honolulu	$737,625.00
HI	Kihei, Maui	$745,454.00
Iowa
IA	Sioux City	$184,000.00
IA	Dubuque	$190,125.00
IA	Iowa City	$206,625.00
IA	Des Moines	$247,000.00
Idaho
ID	Boise	$213,808.00
ID	Coeur d' Alene	$262,850.00
Illinois
IL	Rockford	$184,700.00
IL	Springfield	$205,950.00
IL	Peoria	$212,250.00
IL	Bloomington	$213,404.00
IL	Champaign	$223,317.00
IL	Joliet	$247,975.00
IL	Elgin	$269,500.00
IL	Flossmoor	$286,291.00
IL	Aurora	$291,700.00
IL	Orland Park	$337,875.00
IL	Schaumburg	$339,875.00
IL	Carol Stream	$340,500.00
IL	Naperville	$346,250.00
IL	Deerfield	$551,610.00
IL	Barrington	$583,500.00
IL	Chicago	$815,000.00
Indiana
IN	Evansville	$171,912.00
IN	South Bend	$173,600.00
IN	Indianapolis	$178,166.00
IN	Fort Wayne	$189,275.00
IN	Valpariso	$244,380.00
IN	Schererville	$245,425.00
IN	Munster	$329,300.00
Kansas
KS	Wichita	$151,275.00
KS	Topeka	$151,562.00
KS	Leavenworth / Lansing	$205,740.00
KS	Overland Park	$225,517.00
KS	Lawrence	$237,237.00
Kentucky
KY	Florence	$209,000.00
KY	Lexington	$209,588.00
KY	Louisville	$243,634.00
Louisiana
LA	Baton Rouge	$173,317.00
LA	Lafayette	$180,337.00
LA	Shreveport / Bossier City	$210,250.00
Massachusetts
MA	Worcester	$340,966.00
MA	Springfield	$389,283.00
MA	Taunton	$460,950.00
MA	Framingham	$541,600.00
MA	Acton	$605,687.00
MA	Barnstable / Cape Cod	$639,750.00
MA	Lexington	$729,500.00
MA	Wellesley	$1,193,750.00
MA	Boston	$1,260,000.00
Maryland
MD	Hagerstown	$283,175.00
MD	Bel Air	$350,600.00
MD	Towson / Timonium	$383,125.00
MD	Waldorf	$386,725.00
MD	Easton	$387,375.00
MD	Westminster	$389,950.00
MD	Frederick	$414,875.00
MD	Columbia	$463,000.00
MD	Baltimore City	$513,425.00
MD	Annapolis	$541,500.00
MD	Bethesda / Chevy Chase	$829,750.00
Maine
ME	Augusta	$156,125.00
ME	Lewiston / Auburn	$196,000.00
ME	Bangor	$253,750.00
ME	Portland	$377,250.00
Michigan
MI	Grayling / Roscommon	$149,600.00
MI	Cadillac	$155,475.00
MI	Gaylord	$185,375.00
MI	Grand Rapids	$191,500.00
MI	Mt. Pleasant	$203,125.00
MI	Midland / Saginaw / Bay City	$227,182.00
MI	Port Huron	$229,525.00
MI	Flint / Grand Blanc	$229,933.00
MI	Jackson	$234,400.00
MI	Indian River	$240,375.00
MI	Traverse City	$243,333.00
MI	Petoskey	$249,000.00
MI	Auburn Hills / Lake Orion	$262,967.00
MI	Lansing	$270,700.00
MI	Detroit	$278,658.00
MI	Ann Arbor	$346,250.00
Minnesota
MN	Moorhead	$181,000.00
MN	Rochester	$217,675.00
MN	St. Cloud	$258,766.00
MN	Mankato	$260,883.00
MN	Lake Minnetonka	$382,666.00
MN	St. Paul	$389,600.00
MN	Minneapolis	$397,133.00
MN	Edina	$404,150.00
Missouri
MO	Springfield	$168,872.00
MO	Kansas City	$191,943.00
MO	St Louis	$254,700.00
Mississippi
MS	Tupelo	$163,485.00
MS	Jackson	$221,129.00
Montana
MT	Billings	$142,500.00
MT	Great Falls	$149,750.00
MT	Kalispell	$159,525.00
MT	Helena	$177,950.00
MT	Bozeman	$281,350.00
NorthCarolina
NC	Greensboro	$181,166.00
NC	Fayetteville	$190,000.00
NC	Charlotte	$204,336.00
NC	Winston-Salem	$205,440.00
NC	Raleigh	$228,785.00
NC	Wilmington	$286,650.00
North Dakota
ND	Minot	$133,266.00
ND	Bismarck	$171,438.00
ND	Fargo	$200,800.00
Nebraska
NE	Norfolk	$176,450.00
NE	North Platte	$178,650.00
NE	Kearney	$200,375.00
New Hampshire
NH	Portsmouth	$335,966.00
NH	Nashua	$361,475.00
NH	Hanover	$498,125.00
New Jersey
NJ	Turnersville	$257,385.00
NJ	Cherry Hill	$282,736.00
NJ	Absecon	$351,625.00
NJ	Toms River	$407,984.00
NJ	Metuchen / Edison	$515,725.00
NJ	Clinton	$527,700.00
NJ	Sparta	$529,000.00
NJ	Wayne	$554,700.00
NJ	Marlboro / Manalapan	$554,900.00
NJ	Bridgewater	$602,933.00
NJ	Princeton Junction	$628,000.00
NJ	Montclair	$658,450.00
NJ	Madison	$677,250.00
NJ	Basking Ridge	$684,633.00
NJ	Westfield	$686,950.00
NJ	Warren	$689,000.00
NJ	Ridgewood	$829,500.00
New Mexico
NM	Albuquerque	$243,034.00
NM	Santa Fe	$511,026.00
Nevada
NV	Las Vegas	$359,500.00
NV	Reno / Sparks	$440,817.00
New York
NY	Binghamton	$152,875.00
NY	Syracuse	$217,028.00
NY	Buffalo	$224,725.00
NY	Rochester	$256,333.00
NY	Albany	$284,095.00
NY	Orange County	$390,000.00
NY	Long Island	$584,497.00
NY	Staten Island	$596,000.00
NY	Queens / Bayside	$701,000.00
NY	Katonah	$825,250.00
NY	Rye	$869,125.00
Ohio
OH	Canton	$156,666.00
OH	Dayton	$173,475.00
OH	Akron	$184,250.00
OH	Toledo	$189,448.00
OH	Harrison	$202,633.00
OH	Cleveland	$222,666.00
OH	Columbus	$243,725.00
OH	Cincinnati	$244,250.00
Oklahoma
OK	Tulsa	$142,600.00
OK	Oklahoma City	$185,000.00
Oregon
OR	Salem	$253,536.00
OR	Portland	$304,650.00
OR	Eugene	$327,000.00
OR	Bend	$363,778.00
OR	Medford	$387,500.00
Philadelphia
PA	Erie	$193,975.00
PA	Pittsburgh	$243,100.00
PA	Reading	$243,684.00
PA	York	$244,616.00
PA	Lancaster	$257,625.00
PA	Stroudsburg	$275,800.00
PA	Harrisburg	$276,566.00
PA	Conshohocken	$303,000.00
PA	Allentown	$312,946.00
PA	Media	$350,425.00
PA	Westchester	$386,750.00
PA	Doylestown	$418,000.00
PA	Center City Philadelphia	$574,567.00
Puerto Rico
PR	Puerto Rico	$311,250.00
Rhode Island
RI	Providence	$520,000.00
South Carolina
SC	Columbia	$190,058.00
SC	Myrtle Beach	$191,584.00
SC	Greenville	$195,606.00
SC	Charleston	$307,400.00
South Dakota
SD	Yankton	$149,521.00
SD	Aberdeen	$170,500.00
SD	Sioux Falls	$171,470.00
SD	Rapid City	$194,850.00
Tennessee
TN	Knoxville	$175,520.00
TN	Memphis	$188,050.00
TN	Chattanooga	$203,333.00
TN	Nashville	$209,300.00
Texas
TX	Killeen	$131,328.00
TX	Arlington	$139,510.00
TX	Fort Worth	$148,610.00
TX	Houston	$151,600.00
TX	Lubbock	$164,133.00
TX	Corpus Christi	$179,125.00
TX	Plano	$183,750.00
TX	College Station	$190,964.00
TX	Amarillo	$191,558.00
TX	El Paso	$195,225.00
TX	Austin	$199,381.00
TX	San Antonio	$219,075.00
TX	Dallas	$261,325.00
Utah
UT	Provo	$237,518.00
UT	Salt Lake City	$262,117.00
Virginia
VA	Roanoke / Blacksburg	$220,942.00
VA	Lynchburg	$226,000.00
VA	Winchester	$296,839.00
VA	Virginia Beach	$334,425.00
VA	Richmond	$335,874.00
VA	Lake Ridge	$450,475.00
VA	Leesburg	$621,238.00
VA	McLean	$625,000.00
VA	Alexandria City	$776,399.00
Vermont
VT	Rutland	$288,750.00
VT	Montpelier	$294,666.00
VT	Burlington	$338,750.00
Washington
WA	Tri-Cities	$206,115.00
WA	Spokane	$238,418.00
WA	Tacoma	$313,250.00
WA	Seattle	$386,600.00
WA	Bellevue	$566,330.00
Wisconsin
WI	Eau Claire	$164,225.00
WI	Wausau	$193,791.00
WI	Fond du lac	$217,953.00
WI	Fox Cities	$256,975.00
WI	Green Bay	$275,050.00
WI	Madison	$289,900.00
WI	Milwaukee	$331,000.00
West Virginia
WV	Beckley	$137,875.00
WV	Parkersburg	$146,000.00
WV	Charleston	$179,050.00
WY	Cheyenne	$221,838.00