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Mario Draghi urges increase in Irish social housing supply – Carthy

25 September, 2017 - by Matt Carthy MEP

Sinn Féin MEP Matt Carthy today questioned President of the European Central Bank Mario Draghi regarding the possible emergence of a new housing bubble in the Irish state.

The Sinn Féin MEP engaged with Mr Draghi during a monetary dialogue between MEPs and the ECB in a hearing of the European Parliament's Economic and Monetary Affairs Committee in Brussels this afternoon.

Addressing the ECB President, Mr Carthy welcomed the ECB head’s visit to Ireland last week, pointing out it was the first since he became President of the ECB.

Carthy asked:

“You made some remarks during your visit saying the ECB has not detected any signs of a new property bubble in the Eurozone as a whole, because there has not been a significant growth in credit. But what is the ECB’s view on whether there are signs of a property bubble inflating in Ireland?

“Obviously, there is a major supply shortage in social housing - contributing to a homelessness crisis in Ireland - and massive house price inflation, now at more than 12%. However, according to the OECD, this year, there is also a significant growth in credit, indicating an inflating bubble. Does the ECB also observe these signs, and what steps do you think are necessary to avoid a new property bubble?”

In his response, Mr Draghi stated there was no systemic, Eurozone-wide property bubble but there were localised centres of overheated and inflating markets in some cities and countries. As a result, he said, the solution to such non-systemic inflated markets were to be found in local policy.

Mr Draghi stated in his response that the single most important step governments facing localised inflated housing markets in a situation like the Irish case could take was to increase the supply of social housing. He added that such an increase in supply should be accompanied by ongoing macro-prudential regulation by the Central Bank of Ireland to tackle worrying house price increases.

Commenting after the exchange, Mr Carthy said:

“Essentially, we have heard the head of the ECB supporting the measures that we in Sinn Féin have long been calling for; increasing the supply of social housing and regulating the private housing market to cool the heat. Increasing government investment and immediately suspending inflationary schemes like Help to Buy are common-sense measures that can actually make a difference in what is now a catastrophic housing and homelessness crisis.” 

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