Sunday 22 October 2017

Market regulations - and the reversal of them - could alter the course of people's lives

'With layers of rules applied over the years by Government, the Central Bank and local authorities, the red tape involved in solving the housing crisis has become a Gordian knot. Each strand has produced its intended effects and unintended ripples. But there are side-effects to removing those interventions.' Photo: Gareth Fuller/PA Wire
'With layers of rules applied over the years by Government, the Central Bank and local authorities, the red tape involved in solving the housing crisis has become a Gordian knot. Each strand has produced its intended effects and unintended ripples. But there are side-effects to removing those interventions.' Photo: Gareth Fuller/PA Wire
Mark Keenan

Mark Keenan

Change and counter-change in State-induced property market policy can have unforeseen economic ramifications - but it can also indirectly change the paths of Irish lives. Take a look at the ripples that recent interventions have caused these past few years, both economically and socially.

The latest results of the Irish Independent/REA quarterly average homes survey show just how quickly the market reacts to State intervention - this time to the recent removal of borrowing restrictions and the easing of the tax regime for first-time buyers. Today's survey results demonstrate how those changes resonate in unexpected places.

So first, the State restricts borrowing in Dublin so more people rent in the capital and more people move out to buy. Therefore, prices are controlled in Dublin, but less expected was that they would shoot up artificially in outer counties. Now that the measures have eased, the reverse is happening. Consider also that the decision two years ago by the Central Bank to restrict mortgage lending has already ensured that more Dublin children have ended up moving from school to school than ever before. This is because more city-based parents have been prevented from buying and have been living the renter's nomad existence of a move every two years from lease to lease. In many cases, their children have had to be reschooled. An indirect ripple of that policy is increased instability in young lives which, in turn, could cause social problems down the road.

Please sign in or register with Independent.ie for free access to Opinions.

Sign In

Don't Miss