Property market - House boom benefits Government

Housing Minister Noel Ahern really could not have been more blunt when he clearly blamed the financial institutions for deliberately driving up the price of houses by hyping up the market.

His remarks came in the wake of the Central Bank yesterday sending out another warning to house buyers. The bank revealed that mortgage lending rose by €2.1 billion in March, which amounted to the second highest increase on record.

According to the bank, home-buyers are continuing to borrow huge sums at some of the highest-ever levels.

The forecast months ago that the house market would stabilise at least, if not actually experience a drop, obviously did not happen.

Purchasers, many of them young people, are lumbering themselves with massive mortgages with the enticement of loans to buy the house of their dreams.

Unfortunately, it may well turn into a nightmare.

Mr Ahern may well be correct in blaming financial institutions, but it is not as simple as that.

At the recent IMI conference, Taoiseach Bertie Ahern more or less gave his imprimatur to those same institutions in his positive comments about purchasing property.

Doubtless, he did not intend to aid and abet hyping the market but it is in the Government’s political interest to have the construction boom continue.