Banks must start lending again if the current over-correction of house prices is to rectify itself.
That was the view of a number of people within the property industry following the release of yesterday’s report by the Central Bank that found that property prices here were undervalued by anything between 12% and 26%.
Amongst the reasons given for this was a lack of investor confidence, the current economic situation and a lack of availability of credit, with the latter seen as amongst the most important if property prices are to increase again.
Speaking about the matter, MyHome.ie managing director Angela Keegan said that an increase in lending was a must. She pointed out that just 11,000 mortgages were drawn down last year and that a normal market should have between 30,000 and 40,000.
She welcomed the report, however, saying it had “credibility” because the Central Bank had done the research.
Meanwhile Rachel Doyle, chief operations officer of the Professional Insurance Brokers Association, told the Irish Times that half its 870 members believed the demand for mortgages are growing.
She said though that an unwillingness of banks to lend was proving a major problem.