Ireland Finance , Housing and planning

The mortgage rules debate – divergent interests and collective good


This briefing considers issues relating to housing affordability and credit in the context of the debate regarding the Central Bank’s mortgage lending rules. Relaxation of the rules could be rationalised from particular perspectives. In the short term, it would help some to purchase and would boost activity in various “property”-related services. However, given housing supply shortage, credit expansion would be likely to fuel house price escalation, thereby disadvantaging a far greater number and increasing risk to market stability. This was an important rationale for retaining the rules unchanged, which also illustrates an important policy-decision principle, that the long-term collective good should prevail over perceived individual or sectoral interests or short-term benefit.

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