Dublin: The Central Bank of Ireland and the Economic and Social Research Institute (ESRI) have firmly rejected proposals to reintroduce 100% mortgages for first-time buyers, warning such a move would drive up house prices and significantly increase financial risk for both borrowers and banks.
Speaking before the Oireachtas Housing Committee, Central Bank Director of Financial Stability Mark Cassidy stated that removing the 10% deposit requirement would add demand without addressing supply, potentially pushing borrowers into negative equity during economic downturns.
Dr. Conor O’Toole of the ESRI echoed these concerns, noting the damaging legacy of past loose credit policies and supporting the current lending rules designed to ensure financial stability.
Meanwhile, Central Bank Director of Economics Robert Kelly emphasised the need to deliver an average of 54,000 new homes annually over the next 25 years to address Ireland’s structural housing shortfall. This would require an additional €7 billion in development funding each year, along with major improvements in infrastructure, planning efficiency, and construction productivity.
The ESRI projected modest increases in housing completions, forecasting 34,000 new homes in 2025 and 37,000 in 2026, and identified high land, labour, and material costs as ongoing constraints.
On rent controls, ESRI researchers acknowledged that the 2% cap under the Rent Pressure Zone (RPZ) system may be deterring investment, but cautioned that loosening rent restrictions alone would not resolve supply issues without addressing broader economic and planning challenges.
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