Will there be enough credit and where will it come from?
There is a general consensus about the need for greater housing supply. While the demand side of the Irish property market recovered as the economy started to improve in 2013/2014, housing supply has not met the increasing requirement for accommodation, thereby placing upward pressure on both prices and rents.
In a paper published today as part of the Economic Outlook for Ireland, we examine the funding challenges of the Irish financial sector if this housing demand is to be met.
In simple terms, will Irish financial institutions be able to provide the credit for the mortgages to buy such a volume of houses and provide credit to property developers who wish to build it?