Housing
State supports fuelled new home price growth despite inflation-curbing rate hikes
Property prices plunged worldwide as a result of interest rate hikes, but supports from the government have provided a ‘floor on new home demand’
Government supports have fuelled property inflation in the new homes market while record interest rates stamped down property prices worldwide, according to internal government documents.
In an memo seen by the Business Post, Department of Finance officials told Michael McGrath that state subsidies have helped “offset” the effects of a marathon stream of interest rate increases by the European Central Bank (ECB), preventing disinflation in the residential sector.
Since 2022, major central banks have introduced a series of interest rate hikes in a bid to tackle rampant inflation.
