Brian Lenihan's assertion that the State loan guarantee "will not distort housing prices" shows either worrying incompetence or wilful ignorance. The State loan will clearly distort house prices by supporting a specific part of the market at the expense of the market as a whole.

Just like Orwell's 'Ministry of Truth', which in reality served the opposite function, the 'Home Choice Loan' offers little choice. The loans are only available to purchase new builds, which excludes a massive part of the market: all second-hand home owners hoping to sell to a first-time buyer.

There could not be a clearer signal that Fianna Fail are in the pockets of the developers than this, but there is more.

IT seems highly likely the Budget will contain some sort of stimulus for the housing industry.

Of course, it will not be presented like that. Instead, it will be dressed up by the Government as a boost for first-time buyers. But call it what you like, the reality is that any budgetary stimulus package for house buyers will end up being a bailout for builders and do nothing for want-to-be homeowners.
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You cannot mortgage the generation of tomorrow for the benefit of the generation of today to buy into an asset that’s falling in value - let the market reach clearing price

A Peaceful demonstration will be held outside the Dail on Thursday 25th September at 1:30 p.m. to protest against Government bail outs of property developers. Fianna Fail has intervened in the housing market six times in the past five years. On every occasion, their actions have ensured that house prices remained higher and the inevitable crash although postponed would be even worse than it might have been.

The latest proposals include:

• An expanded system of local authority loans.
• Increase in the amount that can be borrowed from €185,000 to €300,000.
  

The party’s finance spokeswoman, Joan Burton, warned ministers were ready to operate “double standards” for big businesses and ordinary people.

Ms Burton insisted that “reckless” banks driven into turmoil by greedy property speculation should not be rewarded with tens of millions of taxpayers’ cash as the Department of Finance refused to be drawn on whether any contingency plans for bank bail-out along US and British lines were being considered.
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Over the past 10 years house prices in Ireland were driven to inappropriately high levels. This happened through a combination of government intervention (tax incentives), loose lending (up to 10 times salary) and an appeal to peoples fear of missing out on their chance of owning a home.