Ireland's house-builders are taking time out this weekend to look at why there has been a fall off in construction activity despite the pent-up demand for starter homes. The Irish Home Builders Association is returning to Killarney for its annual conference after trying out Galway and Edinburgh. The consensus among its 250 delegates, it seems, is that they should never have left the Kingdom.

Tomorrow's conference will be told that even though there was a huge increase in planning approvals in 2000, 17 per cent fewer houses were under construction in the past 10 months. In Dublin alone, there has been a drop of 26 per cent in housing starts over the first four months of this year.

True enough, many builders have made a killing in recent years and are not too pushed about expanding their business. However, they still blame the slowdown on the Government's intervention in the housing market. The deterrents have been the new obligation to set aside up to 20 per cent of all sites for social and affordable housing, the decision to restrict planning permissions to two years and the abolition of mortgage interest relief.

With the Government apparently unwilling to shift ground in the run-up to the next general election, the builders are now gradually coming around and finding out how the new system works, and whether it is all give and no take. Some of the answers are already available in the Fingal County Council area, where the social and affordable scheme is already up and running. On one particular site near Swords, a developer is selling "affordable" three-bedroom houses which normally cost at least £150,000 to qualifying applicants for, would you believe, £90,000. In other cases, prices can vary from £100,000 to £130,000 - a huge discount, even in a market where prices are no longer rising to any great extent.

Interestingly, the Fingal council has settled for up to 15 per cent of housing sites rather than the 20 per cent recommended by the Government. In some instances it is apparently happy to take even less. Few of the other local authorities have yet made up their minds on whether to grab the full 20 per cent allocation.