Sir, – According to Central Bank governor Prof Philip Lane there is a “material risk of a reversal in house prices” and warns of “excessive debt being taken on at exactly the wrong time” given that the current “affordability crisis . . . could only be resolved by building more affordable homes” which in turn could lead to house prices tumbling again as they did in the crash due to “the overhang of so much supply” (Front page, May 11th).
In other words, people who buy houses during the current upsurge in prices (which is caused by a housing shortage) could be left in negative equity if the government intervenes to solve the current crisis (which is caused by the housing shortage) by building or encouraging the building of more affordable homes (to eliminate the housing shortage.)
So is Prof Lane saying we shouldn’t buy houses until the Government resolves the housing shortage?
Or is he saying the Government shouldn’t resolve the housing shortage because we’ll all stop buying houses? I’m confused! – Yours, etc,
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FINBAR O’CONNOR,
Dublin 9.