Dr. Donal Donovan:

I do not think the IMF is in any way opposed to people owning houses. However, in the case of Ireland, there was the taxation system and this encouraged people to engage in widespread house purchases. In turn, this led to individuals buying not just one but a number of houses. As a result of the fact that there was no significant capital gains tax or a property tax and that there was substantial mortgage interest rate relief, relative to other countries - this is all relative - the fiscal structure in Ireland leaned towards and favoured more than the average in the context of the acquisition of houses, including for investment purposes. Eventually, it ended up with people purchasing houses for speculative purposes. That is the point at which the IMF was trying to get.

On the observation with regard to houses being "somewhat overvalued", I must stress that I am only describing what the IMF said, I am not defending its statement. The IMF was reluctant - as is the case with many other entities - to put a number on how big it believes an overvaluation may be. This is partly because there are dozens of different calculations one can make and people come up with different views. My personal view is that it could have been somewhat more explicit on this matter and might not have used the term "somewhat". However, that did not prove to be the case. Perhaps that is a legitimate criticism.

With regard to the third observation, the IMF does not attempt to provide views on all aspects of the economy. It is not within the organisation's mandate to do so. However, there is no shortage of institutions, both domestically and externally, that will address issues of equality, poverty, the inability of people to buy homes and so on. It is not that the people who work for the IMF, as individuals, do not view this as a bad situation, it is because it is just not part of the organisation's mandate to address specific issues of inequality and difficulties relating to access.