Dr. Conor O'Toole:

I will make a general comment. When we discuss a scheme like this ex ante, we consider what economic channels it may impact on and what side of the market it comes down on, for example, whether it is a borrow-based policy or a supply-based one. A multitude a factors affect the housing market. The Senator mentioned some of them on the supply side. There are a range of developments in terms of the labour market, including households' incomes and employments. All of these factors affect the overall level of house prices and house price inflation. When we consider a policy like this ex ante, that is, it has not happened yet, we try to think through the potential risks and the potential channels through which it might operate. Holding all of the factors constant, we ask what the impact would be if we were to add additional purchasing power for buyers.

That is the type of assessment we do in an exercise such as this, which is purely a short consideration of a scheme on an ex antebasis. Naturally, the economics of the situation would always suggest that taking more purchasing power without a commensurate increase in supply will put pressure on the demand side of the market, which is what we are noting.