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Macro-prudential measures and the housing market

Author

Listed:
  • Kennedy, Gerard

    (Central Bank of Ireland)

  • Stuart, Rebecca

    (Central Bank of Ireland)

Abstract

The Central Bank recently published a Consultation document on macro-prudential policy for residential mortgage lending including limits on loan-to-value and loan-to-income ratios. The consultation process highlighted a number of potential implications of these measures for the housing market, particularly for the rental market and for housing supply. This Letter first discusses some of the underlying economics of the housing market in a simple analytical framework. It then considers the potential implications of the proposed macro-prudential measures on the rental market and on housing supply in more detail, including possible policy options to counteract negative aspects.

Suggested Citation

  • Kennedy, Gerard & Stuart, Rebecca, 2015. "Macro-prudential measures and the housing market," Economic Letters 04/EL/15, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:04/el/15
    as

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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter---vol-2015-no-4.pdf?sfvrsn=12
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    References listed on IDEAS

    as
    1. Duffy, David & McQuinn, Kieran & Byrne, David & Morley, Ciara, 2015. "Quarterly Economic Commentary, Summer 2015," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20152.
    2. Cussen, Mary & O'Brien, Martin & Onorante, Luca & O'Reilly, Gerard, 2015. "Assessing the impact of macroprudential measures," Economic Letters 03/EL/15, Central Bank of Ireland.
    3. Mr. R. S Craig & Mr. Changchun Hua, 2011. "Determinants of Property Prices in Hong Kong SAR: Implications for Policy," IMF Working Papers 2011/277, International Monetary Fund.
    4. Glaeser, Edward L. & Gyourko, Joseph & Saiz, Albert, 2008. "Housing supply and housing bubbles," Journal of Urban Economics, Elsevier, vol. 64(2), pages 198-217, September.
    5. Duffy, David & Byrne, David & FitzGerald, John, 2014. "Alternative Scenarios for New Household Formation in Ireland," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Mark Cassidy & Niamh Hallissey, 2016. "The Introduction of Macroprudential Measures for the Irish Mortgage Market," The Economic and Social Review, Economic and Social Studies, vol. 47(2), pages 271-297.
    2. Kennedy, Gerard & Stuart, Rebecca, 2016. "Housing supply after the crisis," Economic Letters 12/EL/16, Central Bank of Ireland.

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