skip to main content

Central Bank warning on house prices

John Hurley - Central Bank Governor
John Hurley - Central Bank Governor

The Central Bank has published its financial stability report for 2006, which includes a warning about house prices.

The report estimates that house prices are overvalued by 14%.

It also says that the risks and vulnerabilities in the financial system have increased.

The report also finds that household indebtedness is continuing to soar and will reach 150% of household disposable income by the end of this year.

However, the report concludes that the Irish financial system is in a position to cope with any emerging issues or challenges.

Nevertheless, the Financial Regulator is consulting the banks about further tightening the rules covering how much money they can lend for mortgages.

The regulator has already asked financial institutions to set aside more money to cover the risks arising from the strong growth in mortgage lending.