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CENTRAL BANK BOSS Gabriel Makhlouf has advised the government to take stock of their current interventions in the housing market before pursuing ideas such as easing lending rules for property developers.
The Irish Independent this morning reported that the Minister for Housing James Browne is considering alterations to fiscal rules for developers to incentivise the completion of apartment buildings.
It would see developers spending less and borrowing more so that the number of apartment buildings completed in Ireland increase, as the minister has reportedly accepted that delivery of new units has collapsed.
A unexpected shortfall in the number of apartments being completed was what largely contributed to the government’s failure to reach its housing target last year, as construction rates dropped dramatically below expectations in the final quarter of 2024.
Speaking to reporters today, Makhlouf said government has already made a range of increased interventions in the Irish housing market and it is his “very strong” and “basic” advice is to let the those measures play out before introducing new ones.
While the Governor of the state’s banking watchdog said it was “obviously” up to government to decide what policies to introduce or not, his advice is to hold off on making any major interventions for the time being.
“My very strong advice to government is that there are many interventions that they have already made and are making in the housing market,” he said.
“My advice would be to take stock of all of those interventions, make sure they’re all mutually supportive of each other, before introducing new ones. That’s a basic piece of advice.”
Makhlouf said he has not seen any detailed government plans and would not comment on speculation of what the minister or coalition might do. He added, however, that the state’s banks are “well capitalised” and have the capacity to lend to developers.
Asked whether he believes the government’s policy interventions in the housing market – such as grants for first-time buyers, payment assistance schemes and other financial subsidies – are working, Makhlouf said he was “conscious” that there has been many.
“My advice to people who want to introduce new [policies] is to make sure that what you’ve got going, you know what it is achieving and you don’t do the wrong thing,” he said.
He added that he outlined this view to the minister in a letter last month, and told Browne to prioritise government time into making sure land is available for development of housing and infrastructure.
Makhlouf cited a report the Central Bank published in September where it outlined that the “number one issue” facing the market is planning and called for the implementation of new, quicker frameworks.
The report said the “complex and protracted” planning framework in Ireland increases costs for housing and infrastructure construction and would be a roadblock to meet the 52,000 homes the Central Bank estimates need to be built each year, until 2050, to meet demand.
“I would put all my energies at whatever levels of government and whatever levels in industry to making sure that planning rules are being implemented in a way that supports the construction of housing,” Makhlouf said today.
Those who do not learn from history, are doomed to repeat it!
@Brian Hunt: wasn’t it banks throwing loans at buyers that caused the problem, not developers?
@brian o’leary: let us not forget the so called golden circle who all got off without even a slap on the wrist
@BL Music: let’s not forget what caused the problem, banks giving mortgages to people with no deposit and average jobs.
@brian o’leary: So property crash nothing to do with the developers?
@brian o’leary: Where did the houses they bought come from ? Developers solicitors builders were all in the property game… Developmemt land prices were driven out of all proportion as the competition fuelled by easy bank finance was rampant… coupled with low ECB rates and slack lending to spread the debt burden
@brian o’leary: and wasn’t it the central bank who had the oversight of the banking sector and proved themselves spectacularly incompetent at that job.
@Brian Hunt: very little, banks all around the world and loose regulations in respect to mortgages.
@brian o’leary: In short.. No it wasn’t. Banks and developers worked in tandem to drive the ever increasing and over inflated housing market in this country. Considering the banks were left holding 70bn in developers loans when the siht hit the fan, I’m not sure why you even need to ask this question. Perhaps it was before your time.
@brian o’leary: Bring back the Galway tent
@brian o’leary: banks lending to developers and skullduggery between bank managers who were left with big pensions and not a criminal charge between them
@Brian Hunt: Not a lot, other than them selling houses to people who would have struggled to repay mortgages if their circumstances changed or interest rates rose even marginally. They were selling a product, simple as that. Banks and financially clueless consumers were mostly to blame.
@Tommy Roche: lots of people profited from our credit fueled economic facade of which developers were the poster boys. The ultimate responsibility lies with management, the regulator, the politicians and the people who voted them in, although the opposition weren’t suggesting anything that could have protected us from the international downturn. While I’m sure there was incompetence and corruption, after decades of economic stagnation, there was inexperience at managing a strong/ overheating economy.
@David Murray: we all partied david:)
What possibly could go wrong here with a delusional Taoiseach in charge that said we aren’t heading for a bailout 17 years ago. Wait for it, I suppose we’ll hear next that the Galway tent is back up wining and dining developers and senior bankers.
@Tommy: Said we weren’t heading for a bail out then, and recently said, in actual fact, there was no bailout.
@Tommy: Every race meeting has catering tents. Start building houses and house families and you’re a decent person.
Here’s something interesting I spotted. A massive increase in commencements last year, in 2024, an increase of 110.5% compared to the previous year:
https://i.imgur.com/ecvnQrM.jpeg
However, this is not going to translate into new houses in the near term. It’s not positive news.
This surge in the number of submitted commencements is due to builders exploiting the Development Levy Waiver and Connection Charge Refund
As for the Development Levy Waiver, the exact amount saved varies by local authority and the nature of the development, but e.g. in County Louth, the development levy is €11,600 per unit. As for the Water Connection Charge Refund, the standard connection charges are €2,272 for a water connection and €3,929 for a wastewater connection, totalling €6,201 per unit.
Builders are claiming these refunds by submitting excess commencement notices.
They received hundreds of millions of Euros last year. Yes, they will eventually have to pay back the money for houses that are not built, for example they might submit 200 commencements but build 100. They will have to pay back the difference eventually, in 4 or 5 or 6 years time. This is effectively a 0% interest loan that has to be paid back, that does not incentive building houses, but may delay building.
@David Jordan: After I spotted the massive increase in commencement notices, which I was initially excited about, “yay more houses at last”, someone burst my bubble by showing me this:
someone sent me this kink: https://www.irishtimes.com/ireland/housing-planning/2025/02/21/doubt-cast-over-accuracy-of-commencement-notices-as-guide-to-housing-delivery-says-department-of-finance/
@David Jordan: Who would have thought it, jiggery pokery from property developers, and loop-holes supplied by the authorities?
Shows you the arrogance these school teachers , solicitors college graduates have for us
When it all goes tits up , they have no worries ,as their salaries & pensions are always insulated
@Chris: Oh, but this is where you’re wrong. I would recommend to read up on the EU’s plans to requisite private savings and “turn them into investments” – UvdL’s words, not mine.
Just for fun, do a search on SUI on the EU website.
FFG governments have lobbied for developers . Remember the corruption of the so called Golden Circle . They even set up NAMA to park the dodgy loans .. some of these loans were of the €3 billion mark
We do not want a government in bed with developers.. and that is what is been proposed by the government
Fairplay to this bluffer……. he makes Darragh O Brien look competent
@Mary Linton: He makes Darragh O’Brien look intellectual!
Boooommmm! Crash! Have we learnt anything.Once again developers been looked after
@Dave Barrett: booms are caused by credit become to easy for buyers to get, no developers.
@brian o’leary: see above you’re incorrect
@brian o’leary: not correct, about 20% of Nama loans were mortgages, the rest were commercial property, in shopping centers, hotels, etc. More than 50% of Nama were not loans in Ireland at all.
Ban Ire REIT and all the other vultures.
Brace for Impact.
From the mixed messaging I deduce that there is a hidden agenda!
@Padraig O’Brien: which bit are your struggling to understand?
They also need to stop the banks discriminating against self employed people who’s income is ignored by banks when going for mortgages.
@Tony: absolutely. It’s such a backward policy.
True. Another housing boom and surplus housing estates would make it even harder for the leftists to get votes.
More money out that won’t be paid back but to bankruptcy…..
Why won’t the government just repeal rent control laws and abolish single-use zoning? That would solve the housing supply problem almost overnight! Instead they are rehashing old policy positions from the early 2000s that will overheat the market once again. Is the next step a return to the infamous “no-doc” or “liar loans,” where people didn’t even need to prove their income to get a mortgage? We don’t need the government pressuring or incentivising banks to expand lending. Are we also going to see the government to push banks to start offering subprime mortgages again? I’m starting to think that this government doesn’t actually realise that it was the same policies that they are starting to push now that caused the Celtic Tiger property bubble to grow and then eventually burst.
@William Jennings: I know a couple of guys that got 500k loans while on the dole.
@William Jennings: it’s simple. They don’t want to solve the housing crisis.
Rent pressure zones were introduced on account of the housing crisis- so abolishing them is hardly going to solve the crisis overnight.
Already, there are too many investment purchasers completing with private buyers in the second-hand housing market
@brian o’leary: It seems like the property bubble is going to start inflating again. I can’t believe that banks here in Ireland would be this stupid. Did they learn nothing from 2008? I suppose since the government is encouraging this by propping up subprime mortgages with their “Help to Buy” scheme, they have no real but to accept all these people who have no hope of ever paying back their mortgage like the couple you mentioned.
@brian o’leary: you win “lie of the week”
@brian o’leary: sure you do
@Thomas Sheridan: Actually the evidence is in, rent control causes the supply of housing to be choked and the reason we have a housing crisis in this country can be largely attributed to the strict rent control that we have in place. Argentina recently abolished rent control and their housing supply increased by nearly 50%. Profits are what encourage construction companies to build. When profits are high, other construction companies enter the market as well. This creates competition and that’s what creates more housing and lower rents. With rent control in place, landlords can’t charge enough to break even so they either flee the market or allow their properties to go into disrepair because they don’t have the incentive to pay for upkeep because their profits are artificially capped.
@William Jennings: landlords are benefitting from huge rents here, higher than they have ever been in the states history, allowing them charge more won’t increase house supply, it will simply mean there are less houses to buy for owner occupiers. Any landlord who is not able to viably make a descent return in the current market is over borrowed. Rents in Stockholm are 30% cheaper than Dublin despite property being much more expensive to buy in Stockholm. Landlords are not leaving the market in droves as was claimed last year and landlords not only have massive rents but huge property price inflation, huge win win. The only landlords who may be struggling are those who want to put very little into initial purchase and expect their rental income to cover the mortgage plus give them an income and enable them to get out and sell the property in 20 years making them a millionaire.
Think it was in the 90,s when most governments were demolishing aparment blocks as they led to negative societal outcomes for residents of the areas. Most said never again and here we are lessons not learned.
Sure lets ask Bam to build a few social housing estates on government land, couldnt see an issue with this either
have your say