Summary: <br> <a href="https://twitter.com/john_mcguirk" target="_blank" rel="noreferrer noopener external" data-wpel-link="external">John McGuirk</a> is the editor of Gript.ie<br> <br> <br> <br> There is no doubt about the extent of the housing problem in Ireland, certainly not if you’ve been listening to this podcast, I’ve been banging on about it for longer than I, probably longer than you, care for.<br> <br> <br> <br> <a href="https://blog.hereshow.ie/wp-content/uploads/2022/01/John-McGuirk-1.png" data-wpel-link="internal"></a><br> <br> <br> <br> And if you’ve been listening, you’ll know that I’m a sceptic about the more creative, more interventionist suggestions that are supposedly targeted at easing the crisis. There are two reasons why I don’t trust them. The first is that they generally don’t work – for example the focus on banning Airbnb, which sounds good, until you realise that, in Dublin for example, the <a href="http://insideairbnb.com/dublin/?neighbourhood=&filterEntireHomes=true&filterHighlyAvailable=true&filterRecentReviews=true&filterMultiListings=false" data-wpel-link="external" target="_blank" rel="external noopener noreferrer">number of houses or apartments on Airbnb that could potentially be released to the residential market is 253</a>.<br> <br> <br> <br> <br> <br> <br> <br> When you compare that to the <a href="https://www.independent.ie/business/personal-finance/property-mortgages/revealed-183000-vacant-homes-lying-idle-in-demand-hotspots-nationwide-35710041.html" data-wpel-link="external" target="_blank" rel="external noopener noreferrer">31,000 residences that the CSO records as vacant in the capital</a>, it’s clear that’s a vastly bigger factor, but if you look at the relative amount of political comment and energy that goes into those two issues, there is a complete lack of proportion. On Twitter you see a huge amount of energy going into criticising Airbnb, and almost nothing about vacancy, and the same pattern is reflected across the political discourse.<br> <br> <br> <br> I can’t quite work out why one topic gets far more attention than another that is objectively measured at more than 100 times greater – sometimes I begin to suspect that some dark political marketing agency is stoking up the Airbnb talking point to distract from the real issue, paid for by on the sly by people hoarding vacant land and housing, but that would be a bit too paranoid. Never attribute to evil anything that can adequately be explained by stupidity.<br> <br> <br> <br> That said, it takes an awful lot of stupidity to explain an article in the Irish Times from before Christmas, which was headlined “<a href="https://www.irishtimes.com/business/financial-services/central-bank-to-consider-step-break-from-mortgage-rules-1.4757227" data-wpel-link="external" target="_blank" rel="external noopener noreferrer">Central Bank to consider ‘step break’ from mortgage rules</a>”. The first two sentences of the article said,<br> <br> <br> <br> Homebuyers earning less than €60,000 may be offered a “step break” from the Central Bank’s strict mortgage lending rules under a series of changes being considered by the regulator.As part of a review of the measures, the Central Bank said it would consider a number of suggestions made to it … including loosening the current loan-to-income (LTI) and loan-to-value (LTV) rates for certain categories of buyers.<br> <br> <br> <br> I was really shocked to read this, because what the Irish Times here is calling the Central Bank’s ‘strict’ rules, are the basic prudential measures that were brought back after the post-Celtic Tiger crash. During the boom, prices were driven higher and higher by people who could borrow more and more, and it all ended in tears.<br> <br> <br> <br> The Central Bank started enforcing prudential rules which are designed to prevent banks from going bust, just after the banks went bust – people can’t generally borrow more than 3.5 times their salary, or 90 per cent of the value of the house they are buying. But now with property prices back to boom-era levels or higher, developers and banks seem frustrated that there is a limit to how deeply they can drive the ordinary p...
