Ireland housing model finds tighter credit lowers house prices but raises rents
A research paper using Ireland as a case study finds that contractionary credit shocks lower house prices initially but raise rents in both the short and long run. The model examines mortgage loan-to-value and loan-to-income limits introduced in 2015, alongside real interest rate shocks. The authors caution that the findings are not a comprehensive assessment of policy costs and benefits because the model excludes the cyclical build-up of financial-sector risks.