Warnings against intervening in property market

THE Government must not intervene to prevent house prices falling further to more sustainable levels and instead should have acted years ago to dampen house prices, according to a report form the Brussels-based think-tank, Bruegel.

It warns that the slowing housing market will subtract four percentage points from the country’s GDP growth this year and remain a drag on growth for several years.

The organisation, which specialises in international economics, says the housing boom and bust in Ireland and Spain holds lessons for the fast growing economies of new EU member states.