The Central Bank has ruled out a temporary loosening of mortgage lending rules during the coronavirus crisis while warning that the imbalance between housing demand and supply is likely to persist “for an extended period”. Vigilance would have to be maintained, however, as the combination of strong demand, risks to housing supply and additional debt could create “pro-cyclical dynamics between credit and house prices”. As a result of the pandemic, new mortgage lending, issued under the current rules, amounted to €5.8 billion in the year to the end of October, an 18 per cent decline on 2019, it said. Mr Makhlouf also warned housing supply was likely to remain below pre-pandemic levels, “and indeed below estimates of medium-term demand, for an extended period”. DisruptiveThe Central Bank warned that a disruptive Brexit could exacerbate the effects of the pandemic.

Source: The Irish Times November 26, 2020 12:32 UTC