Central Bank Governor Gabriel Makhlouf has advised the government against rushing to ease lending rules for property developers, suggesting existing housing market interventions should be given time to take effect before implementing new ones.
The Irish Independent reported that Housing Minister James Browne is considering changing fiscal rules to allow developers to spend less and borrow more, aiming to boost apartment construction after a significant shortfall contributed to the government missing its housing targets last year.
Speaking to reporters, Makhlouf emphasized his “very strong” and “basic” advice is for the government to evaluate current measures before introducing additional interventions.
“My very strong advice to government is that there are many interventions that they have already made and are making in the housing market,” Makhlouf stated. “My advice would be to take stock of all of those interventions, make sure they’re all mutually supportive of each other, before introducing new ones.”
While acknowledging it was “obviously” the government’s prerogative to determine policy, Makhlouf noted he hasn’t seen detailed plans and wouldn’t comment on speculation. He did, however, confirm that Irish banks are “well capitalised” and have capacity to lend to developers within existing frameworks.
When questioned about the effectiveness of current housing policies—including first-time buyer grants and payment assistance schemes—Makhlouf cautioned against hasty action. “My advice to people who want to introduce new [policies] is to make sure that what you’ve got going, you know what it is achieving and you don’t do the wrong thing,” he said.
The Central Bank Governor revealed he had communicated these views to Minister Browne in a letter last month, recommending the government focus on ensuring land availability for housing development and improving infrastructure.
According to The Journal, referencing a Central Bank report from September, Makhlouf identified Ireland’s “complex and protracted” planning framework as the “number one issue” facing the housing market. The report indicated these planning challenges increase construction costs and impede progress toward the estimated 52,000 homes needed annually until 2050 to meet demand.
“I would put all my energies at whatever levels of government and whatever levels in industry to making sure that planning rules are being implemented in a way that supports the construction of housing,” Makhlouf concluded.