Central Bank mortgage cap in place for good reason - Varadkar

Minister for Health Leo Varadkar has said the Central Bank mortgage cap is in place for good reasons.

He was responding to Minister for Finance Michael Noonan’s view given in an interview with The Irish Times on Friday that he wants the Central Bank to review mortgage caps for first-time homebuyers.

Citing anxiety about constraints in the Dublin market particularly, Mr Noonan said there was currently a shortage of starter homes in Dublin.

His intervention comes eight months after the Central Bank introduced loan and income limits to damp down the property market.

Mr Varadkar said the country cannot go back to a time where people invested in property because they were afraid not to buy.

Balance desire

The Minister said it was important to balance the desire of young people to buy a home and ensure those people don’t lose out by having to buy a property while prices are escalating.

Mr Varadkar said: “I don’t think we will be doing people a service by going back to that.”

“I think what the Central Bank and the regulators in any Government have to do is to balance on one hand, our absolute desire that young people are able to buy their own home, but at the same time to ensure those young people don’t actually lose out by having to buy houses in an escalating property market,” Mr Varadkar said.

“Essentially what happened in my generation [was] where we all rushed to buy houses and apartments under the fear that it would cost 15-20 per cent more the next year.

“So I don’t think we’ll be doing young people looking for a home any service by going back to that - but at the same time we want to make sure there is a good supply housing coming on stream and that people who do want to buy a house can do so and do so accordingly.”