Last year the Central Bank produced a report concerning Ireland being susceptible to international property fund “fire sales” carrying “billions or euro worth of homes and offices” . The report concluded “the need to explore possible macroprudential policy interventions for funds”
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Wld be interested to hear anyone’s thoughts on what those interventions might be?
I could understand them wanting to re-stoke interest in the market - it’s on shaky ground here and globally and a collapse in prices wld be financially destabilising. Since 2015, the CB has been consistent in its actions to avoid run away property price inflation so the only way, imho, this change makes any sense, is that they are expecting an increase in supply.
“ Funds that invest in Irish retail and commercial property typically have gearing of around 40pc and will not be affected by the changes.
But those involved in the residential sector can often borrow 70pc of their funds , which reflects the high-risk/high-reward type of investor attracted to the Irish market. That means the new rules are likely to impact investors who fund and invest in apartments and houses. “