OECD tells Central Bank easing home loan rules risks pushing prices higher

European think tank says move implemented in October could destabilise economy

Gabriel Makhlouf, governor of the Central Bank: OECD warned that loosening rules on new home loans risked pushing prices higher and threatened the country’s financial stability. Picture: Bryan Meade

The Central Bank of Ireland’s decision to loosen rules on new home loans risks pushing prices higher and heightening the threat to the country’s financial stability, the OECD has warned.

The Paris-based policy group said the regulator’s move in October to ease lending restrictions could help more people afford to buy a house, but that it also threatened to further fuel demand in an already under-supplied market.

Under the changes announced by the Central Bank ...