The Construction Industry Federation has called for the top rate of stamp duty to be cut from 9% to 5% in the Budget, in order to restore confidence in the housing market.
The lobby group has predicted only 45,000 new homes will be built next year. That is 20,000 less than the Department of the Environment's estimate.
Speaking at the launch of the Construction Industry Federation's annual review of the sector, president Hank Fogarty said the housing market had stalled because of negative sentiment.
He said that while there was a need for 65,000 new homes a year, it was likely that only 25,000 were built in the first six months of 2007.
Mr Fogarty called on the Government to lower the top rate of stamp duty from 9% to 5%. He also urged a bigger increase in mortgage relief for first-time buyers and a renewed commitment to full implementation of the National Development Plan.
Mr Fogarty said that, if necessary, the Government should borrow up to the EU limits in order to fund infrastructure investment.
