Call for easing of Irish central bank’s lending rules

homes in Dublin

It comes as the price of second-hand homes in Dublin stabilised in the third quarter of 2021

Central Bank lending rules for mortgages should be reviewed and eased to enable first-time buyers to become homeowners, DNG chief executive Keith Lowe has said.

It comes as the price of second-hand homes in Dublin stabilised in the third quarter of 2021, according to DNG’s market review.

Prices for second-hand homes rose by 2.1% in Dublin in the three months to the end of September. This is down from the 3% increases in Q1 and Q2 of 2021.

Despite this apparent easing, the average resale price of a property in Dublin is now €492,531 ($571909.76), compared to €452,644 ($525594.37) at the end of September 2020.

Mr Lowe said affordability still remained the key issue around access for prospective first-time buyers and this was why Central Bank lending rules needed to be reviewed and eased, to help buyers to the greatest degree possible. These rules were introduced to prevent people from borrowing beyond their means following the last financial crash in 2008.

The acceleration in property prices we saw from June 2020 until June this year was unsustainable, and it is good to see that the rate of price inflation eased somewhat in the three months to the end of September, Mr Lowe said.

However, with prices still increasing, albeit at a marginally lower rate, affordability remains the key issue in the Dublin residential market and to this end, we believe that the Central Bank macroprudential lending rules need to be reviewed and eased to help buyers to the greatest degree possible, he said.

It is still the case that many would-be first-time buyers who are currently renting would pay less per month on a mortgage than they currently pay in rent for the same property, he said.

Not only would this promote home ownership in line with the Government’s Housing For All action plan, but it would also free up desperately needed accommodation in the private rented sector, Mr Lowe said.

The report highlights the average price of a second-hand home in Dublin rose by 8.8% in the past 12 months, down marginally on the high of 9.4% recorded in the year to June 2021.

DNG director of research, Paul Murgatroyd, said: The latest results of the DNG House Price Gauge indicate that the rate of growth in residential property prices is stabilising and the impact of Covid-19 on the market is showing signs of unwinding following 18 months of volatility, with a lower rate of price growth and a small improvement in supply both evident during the third quarter this year.

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