It’s not supporting it, if anything it’s hampering it IMO, removing that uncertainty will be a positive for growth.
The 5-7% growth is IMO driven by earnings, savings, exceptions to CB rules, inheritance and other unearned income. The CB rules are I think providing some constraint but that manifests itself most to those buyers whose only way to service a mortgage is from PAYE earnings.
I dunno. It seems to me the entry-level PAYE earnings people and the mover-uppers are in two different segments of the market that have been diverging. The bottom end remains constrained by lending limits. To get a 5% increase in that segment you’d have to assume that somebody in the running for a €300k mortgage can save €15k on top of the deposit requirement, while possibly also paying rent. I think the pips are already squeaking.
Somewhere around the €600k mark you have the start of the mover-uppers. This segment has been increasing strongly since 2012. But (as mentioned on other threads) it seems to have languished in the last 12 months. I’m not sure why, but someone else has suggested that all the pent-up demand has now been satisfied.
In any case, if the lower end is constrained by lending limits and the upper end has stagnated for whatever reason, I don’t see where additional price inflation can come from. (But I’ve been wrong many times before).
It would be worth adding that if the lower-end is stagnating on CB rules, then it prob has a knock-on effect into upper level as many will be trading up so the house/apt they are selling isn’t increasing much in value
Perhaps all of that means the the next (Property) recession won’t be as server as the last given the lower levels of exposure to any one sector (like housing - although maybe financial services has filled its place), so there won’t be such a drop of lending given the rules that are in place. Certainly at the lower end anyway where is drives the market which is overall a good thing.
I think the property market could tank, no bother. And it could have severe knock on effects on the economy, suppressing demand through supply chains, also hitting employment figures and exchequer returns. The CB rules are primarily there to protect the banks from themselves remember… we could have a recession but hopefully won’t have to recapitalise banks.
Income tax revenue is a little below target for the first four months of 2019. No basis for extra borrowing. Who knows how long we can rely on Corporation Tax to prop up current expenditure? Without it, we could never satisfy the teachers, nurses and Gardai.