“Unpopular” and “politically difficult decisions” could be the only way to fix the housing market, according to Taoiseach Micheál Martin.

He has suggested that tax breaks for investment in homebuilding to encourage private investment in housing.

Dublin South West TD with People Before Profit Paul Murphy told The Pat Kenny Show that this proposal was “extremely concerning”.

“We’re a matter of months after a General Election where the idea of giving tax breaks to developers was not floated by Fianna Fáil or Fine Gael,” he said.

“They didn’t stand for election on that basis and now it’s quite clear that they’re certainly going to try this.

“Let’s remember, we have been here before – I mean, anyone who has any sort of memory remembers the role that Section 23s, which were tax breaks for developers to build rental accommodation and other property tax breaks.

“They played a central role in the building of the property bubble and then the crash.”

Taoiseach visits Respond housing development in Balgriffin. Photograph: Julien Behal Photograph / RollingNews.ie

Section 23 and Section 27 incentives were brought in around the late 80s and early 90s for the purchasers of apartments which were restricted by maximum sizes.

The idea was that the tax break would benefit the purchaser – however, developers extracted the tax break and raised prices for consumers.

Deputy Murphy said there is “no small number” of incentives currerently available to property developers.

'We haven't been here before'

Director of Property District Carol Tallon disagreed with Deputy Murphy and said that “we haven’t been here before in terms of the market dynamics”.

“Changing policy and changing an approach in response to data is exactly what we need for the marketplace and what we need for housing delivery,” she said.

“We want a more data informed policy approach – but also, we need to just draw the distinction here; are we talking about developers or are we talking about home builders?

“Because my understanding is that this is very much restricted to home builders, those who are actually delivering homes in the areas that we know where homes are needed.

“So, we’re not talking about speculative development and incentivising that at all.”

However, Ms Tallon agreed we need to get “better at delivering value for money” when it comes to housing.

Main image: Split image showing Micheál Martin (L) and a house being built (R).