Kieran O'Donnell (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am asking a question. We suddenly had a measure in place by the Central Bank. It was put in place by the predecessor of Mr. Lane. It was a €220,000 limit for first-time buyer with a 90% loan. It was draconian in nature and particularly impacted those in Dublin, more so than outside Dublin. Suddenly, the Central Bank took away any limit. The Central Bank left the loan limit at 90%, with exceptions for some people who could go to 95%.

Not long ago during the Celtic tiger, we were complaining that mortgages of 95% and upwards were fuelling the price of houses. I want to know why the Central Bank took away the limit completely.

Let us consider the first three months of this year. House prices went up by 4.3% approximately. The Governor stated last November, when the Central Bank took away the limit, that if there was a material change then the bank would make changes to the rules. Now, the Governor is saying that the bank will look at it every November. November is eight months away. That is too long. It seems strange that the Central Bank went from having a limit to no limit at all. Is that a contributory factor in the increase in the price of houses?

What does the Governor regard as a material increase in the price of houses? At what point will the Governor seek to bring some sort of control over the increase in the price of houses? November is eight months away. If house prices continue to spiral at the rate they are going, it will put the value of the average home beyond the ordinary person.

I always look at it in simplistic terms. Can the average couple afford to buy a home? If they cannot afford to buy a home, then we have a dysfunctional system. The Governor referred to stability. Stability is not a macro issue; it is about something else. We saw a couple on an RTE programme last night. They bought a one-bedroom apartment during the Celtic tiger because they were told that was the only way to get on the property ladder.

They have a family and they have to move out of that one-bedroom apartment. The loan is in negative equity and is a millstone around their necks. They are renting elsewhere.

They are not first-time buyers curtailed by Central Bank restrictions. However, let us consider the first-time buyers who are renting, who are in their 30s and approaching 40 years of age. Such people are wondering whether they will ever qualify for a mortgage or buy a family home. I am asking a question. By lifting that limit, is it possible that the Central Bank may be contributing to depriving these people from buying homes that they can afford?

At what point will the Governor consider that a material change in price has taken place, considering we have seen a 4.3% increase in the first three months of this year? At what point will the Central Bank step in and make the changes to ensure that an ordinary person, who is making a living in an ordinary job, can afford to buy a first-time buyer home?