Irish houses are small, of poor quality and very highly priced.

A new report on housing in Europe carried out by London based Policy Exchange finds that Irish houses are small, poor quality and over priced in comparison to other European countries.

The international study of housing says Ireland's overly centralised planning system and the way local authorities are funded are the main reasons that prices are so high.

New houses being built in Germany are on average one-fifth bigger than new houses being built in Ireland. To add to this, house price inflation is virtually unknown in Germany.

So, how come we’re paying more and getting less?

An example in one German housing estate is of a 130 sq m three bedroom house for €190,000. All the houses have solar energy systems that cut heating bills by a third.

One resident Ute Wanders describes it as a great place to bring up children with lots of green space.

The Policy Exchange Think Tank says that part of Ireland’s problem is an over centralised planning system that does not act fast enough.

Oliver Hartwich Analyst with Policy Exchange says that the problem is that Irish planners are dependent on central government grants and are therefore not providing the kind of housing that is needed.

Housing supply in Ireland is not as responsive as it is in Germany or Switzerland.

Just forty per cent of Germans own their own homes and they have a declining population. Ireland has a fast growing population and a tradition of home ownership which places extra pressure on demand. However, they may still have some answers for Ireland’s housing problems.

An RTÉ News report broadcast on 16 September 2005. The reporter is Sean Whelan.