Friday 15 December 2017

Coalition tells troika housing market at bottom

Colm Kelpie

Colm Kelpie

HOUSE prices may have bottomed out last year, the Government has told the troika.

But the assessment was derailed by data from the Central Statistics Office showing prices nationally fell.

Latest figures show that property prices in Dublin are 3pc higher than a year ago, but fell 2.6pc nationally. The rate of decline has eased since January.

However, the Government appears optimistic that the floor has been reached.

Banks will also be held to "ambitious targets" to tackle the mortgage crisis in a way that will ensure "durable reductions in arrears", according to draft Government notes following the latest troika review.

It says the banks must publish figures for the number of struggling homeowners who fall back into arrears after deals have been done. And it said repossessions will happen in some cases.

The documents, released by the Department of Finance, will form part of the troika's final commentary on its ninth review mission to be published soon.

In an upbeat assessment, the Government said bank lending had "turned a corner" and it was determined to exit the bailout programme.

Vicious

"There are signs that bank lending may be turning a corner, associated with a potential bottoming out in housing prices in 2012," the document says.

The plan for rolling out water charges will be developed during consultations before July, to be done by the Commission for Energy Regulation.

The Water Services Bill will be published by the autumn.

By September, data from the banks on deals done on mortgages will be published.

Meanwhile, in a letter to IMF chief Christine Lagarde, Finance Minister Michael Noonan and Central Bank governor Patrick Honohan stressed the importance of getting a deal on Ireland's banking debt.

The letter says: "It must be noted that a number of issues remain to be resolved, most notably the delivery of the Euro Area Heads of State and Government commitment on breaking the vicious circle between banks and the sovereign in the EU and to examine how to improve the sustainability of our well performing programme.

"Furthermore, our recent request for an extension of maturities on EU funding is an important ongoing issue."

A similar letter, which was also released by the Department of Finance, was sent to senior European officials, including European Central Bank President Mario Draghi.

Irish Independent

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