Milestones in 25 years of housing finance in Ireland

Market-oriented housing policies in Ireland have long promoted owner-occupation to meet the housing requirements of its growingly industrialised and urbanised society. Thus, availability and access to housing finance has been a central issue for Irish housing, particularly in the past quarter century. Housing finance was critical to the growth of development and construction, expansion of credit, rising house prices, increased household formation, and more recently, a major financial crash and recession. As a result of the liberalisation of financial regulations from the late 1980s, lowering interest rates and access to international finance, mortgage credit rose dramatically between 2000 and 2007. This created a massive housing bubble, possibly the biggest in the industrialised world, followed by the biggest collapse, not just in house prices by more than half, but also in Irish State finances. Today, there is a new housing finance regulatory landscape, instigated by the European Central Bank, albeit in a context where all national lenders (except one) are nationalised. As the rate of new household formation grows among a relatively young population, there are indications of greater demands for both private and social rented housing with resultant pressures on the market.