Soft landing for the housing market?
Sir, – It is astonishing to see ratings agency S&P predicting a “soft landing” in the housing market (News, September 3rd), particularly in the light of Central Bank director Philip Lane’s prediction, featured on the front page of The Irish Times on May 11th, that there is “a material risk of a reversal in house prices” and his warning against “excessive debt being taken on at the wrong time ” given that the current “affordability crisis . . . could only be solved by building more affordable homes” which would lead to a collapse in prices due to “the overhang of so much supply”.
S&P thinks that building more houses will stabilise the housing market, whereas Philip Lane thinks building more houses will cause the housing market to collapse.
Clearly the solution is to build just enough houses to stabilise the market but not enough to cause another crash.
But how do you know you have built too many houses?
When you have another crash, I suppose.
Better to play it safe and avoid addressing the housing shortage. In other words, allow Government housing policy to be dictated by market forces rather than by the needs of citizens.
Not that an Irish Government would ever do such a thing. – Yours, etc,
Sir, – News that the Standard and Poor’s ratings agency is anticipating “a soft landing” to our current property boom seems timely. After 10 years, I think we’ve just about recovered from the last one. – Yours, etc,