Rigid mortgage lending rules imposed by the Central Bank are forcing property prices to stagnate and discouraging builders from constructing homes.
A new survey by Davy Stockbrokers has also concluded that the property market is “clearly characterised by stagnating prices and an under-supply of land”. It found the market is weaker than developers may have expected at the beginning of the year – particularly in Dublin.
After conducting a survey of home builders, it said the housing sector was locked in a state of stubborn under-supply coupled with high demand.
This has been primarily driven by headwinds to lending created by the Central Bank’s macro-prudential rules, limiting bank lending in relation to loan-to-value and loan-to-income ratios.