Mortgage rules 'working well to keep house prices in check'

New research finds that the average loan size would be 8% higher without the current Central Bank controls.

New rules were put in place six years ago as the economy started to recover from the bursting of the property bubble created by uncontrolled credit. Picture: iStock

There is no need to tighten the Central Bank rules that restrict the amounts of home loans households can borrow despite new home supply having been severely restricted by the shutdown of building sites during the Covid-19 crisis, new research by the ESRI has found. 

ESRI research professor Kieran McQuinn said that the research finds that the average loan size would be 8% higher without the current controls under the regulator's so-called macroeconomic prudential rules which "would have a follow-through effect on house prices".