No boom in Dublin house prices - Noonan

Monday 09 December 2013 15.23
Finance Minister Michael Noonan in Brussels for Eurogroup meeting
Finance Minister Michael Noonan in Brussels for Eurogroup meeting

Finance Minister Michael Noonan said the new development of banks offering mortgages targeted at landlords could help alleviate problems in the rental market. 

Today state-owned Permanent TSB launched new loans for buy-to-let investors. It comes as rents have been rising in Dublin and there have been concerns about a shortage of residential properties for tenants.  

Mr Noonan made his comments ahead of the Eurogroup meeting of euro zone finance ministers in Brussels. 

"The economy is being repaired all the time and decisions like that by the banks are commercial decisions which are monitored by the Irish Central Bank. If the regulators in the Central Bank are happy then I'm happy," the Minister said.

We are at the very early stages of the restoration of the fortunes of the construction and building industry," Mr Noonan stated.

He said that some of pressures are evident already. 

"Rents in Dublin are going up. So to lend on favourable terms to the buy-to-let sector seems to me to be addressing a problem in the rental market. And I would hope that would lead to the stabilisation of apartment rents as extra apartments are provided," he said.

The Minister said prices for some property was below the cost of building. He said there was not a boom and "prices were barely getting off the ground."

Mr Noonan said that today he would be briefing other euro zone ministers as part of the reporting of the 12th and final review of Ireland's bailout programme. 

"I'll have a few things to say to my colleagues. I'll be thanking them and pointing out we will continue to follow policies to grow the economy and create jobs," the Minister said. He said he would also draw their attention "to our strong employment figures and strong revenue figures."

Minister Noonan said discussions on the banking unions would begin this afternoon.  He said it was possible there could be agreement on banking union at a meeting of EU finance ministers tomorrow. 

But he stressed that some "wide differences" remain. 

On the question of getting funding in relation to Irish banks, Mr Noonan said the European Stability Mechanism agreement has a sentence regarding retroactive bank funding but "how and when" it could happen had to be worked out. 

Jeroen Dijsselbloem, the head of Eurogroup, ruled out any deal to tackle the tracker mortgages in Irish banks which continue to lose money for Irish lenders. 

Mr Dijsselbloem said that there were there are a number of challenges ahead in the Irish banking and housing sector, although there were positive economic developments in the country.