Banks blamed for rapidly rising property prices
HOUSING Minister Jan O'Sullivan has blamed the banks for "fuelling" rapid recovery in the Dublin property market.
Ms O'Sullivan said she believed the continued reluctance by financial institutions to hand out loans to developers was inflating property prices.
She warned that the Government must "keep the pressure" on banks to lend in order to "get the construction industry moving again".
And she said she expected the pattern of property price rises in Dublin to spread to other cities. "I would hope it will insofar as we want to see demand again, we want to see houses being constructed for people to live in them, but we don't want it to be a developer-led demand, we want it to be a community-led demand," she said.
Dublin property prices climbed by more than 15pc in the 12 months to October, according to the latest official figures from the CSO.
The rising property prices mean it is getting more difficult to afford a mortgage in the capital. However, ministers have so far stopped short of expressing concern at the trend.
While refusing to use the phrase 'bubble', Ms O'Sullivan squared the blame at the banks.
"The lending institutions, despite what they may say, they're not really lending to the extent that we would need for people to have money and who have decent jobs to actually buy properties. I think that's fuelling the problem."
Separately, Ms O'Sullivan confirmed that a new deposit agency designed to act as a go-between for landlords and tenants would be set up some time in the new year.