Central Bank of Ireland governor Gabriel Makhlouf, a man who is normally always on message, went a little off-piste yesterday, wondering out loud if the Government’s many policies and interventions in the housing market were “mutually supportive”.
The implication is that some might be working against others. Speaking at the launch of the bank’s updated consumer protection code, Makhlouf said the Government should “take stock” before throwing another log on the fire.
He was responding to reports that the Government is considering a move to ease lending restrictions on developers so they can invest more in housing.
The Government has been on the backfoot on housing since taking office earlier this year because of a slowdown in new home completions last year and is now considering several measures to bolster supply.
Perhaps fearing his patch was under attack, Makhlouf insisted that banks were “well capitalised” and “had the capacity to lend” and that the Government’s focus should be on planning, which he described as the “number one issue”.
Having the capacity to lend is one thing, lending is another. Even the dogs on the street know that traditional banks have all but abandoned the development sector since the crash.
Either way, Makhlouf’s comments touched a raw nerve in Government. Within hours Minister for Housing James Browne batted back that it was finance, and not planning, that was the priority issue, particularly concerning building apartments, and that he disagreed with the governor.
Browne insisted that finance was “broken” and was not working.
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“Finance is a real issue for delivering housing in this country, certainly in the private sector. As a Government, we have to look at every measure possible that could be used to deliver that housing,” he said.
The acceleration in housing supply in 2021, 2022 and 2023 was in the main driven by apartment developments in Dublin. The current stagnation is primarily because of a fall-off in this type of development.
The timing of the governor’s words was interesting, coming in advance of a meeting between the two.
