Conor Pope from the Irish Times had an interesting article on lending restrictions and did a good piece on it in today’s paper. In the piece he quoted Karl Deeter from Irish Mortgage Brokers on his views about the effect of the Central Bank rules on the property market.
“Karl Deeter, a mortgage broker and keen observer of the property market, has written an extensive report on Dublin’s boom-and-bust cycles spanning 300 years. He is not one of the Central Bank’s cheerleaders, and he is unconvinced that the 2015 scheme deserves much credit.
“I don’t think the new rules have had any real impact on the house market despite how it might be characterised,” he says.
Deeter points to an International Monetary Fund study of six countries that introduced lending restrictions. The report indicated that the rules made little difference, he says.
“In the credit market the rules have caused a fair bit of chaos. But I think prices were going to slow down anyway. We are in the middle of a property cycle, and cycles such as this have always slowed down in the middle, after which prices started to ramp up again. They haven’t started ramping up yet, but they will.
“The truth is that we don’t do good regulation in this country – and never have,” Deeter says. “So maybe the fact that the Central Bank brought out any rules is worth celebrating. Maybe it does show that the regulator, while still unwilling to bite, is at least willing to growl.” But, he says, the rules have not fixed and will not fix the property market: “We will still have booms and busts.”