Conall Mac Coille: Central Bank rules should curb price growth
It is worth remembering how wild Ireland’s mortgage market became during the Celtic Tiger era
Now that house price inflation has returned to ‘double-digit’ levels, it’s natural to ask whether the market is overheating and we are in danger of repeating the mistakes of the Celtic Tiger era. Certainly the 12.8 per cent residential property price inflation in September has been facilitated by the mortgage market. With few houses being built, or for sale, competition among buyers to purchase homes is intensifying – and they are taking out higher levels of mortgage debt to bid up prices. During the summer months the average mortgage loan was €221,000, up 11 per cent from €199,000 12 months ago. So the ingredients for a credit-fuelled house price spiral are certainly in place.
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