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More money, more problems

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By Michael O’Connor

This week, the Central Bank eased their lending limits to allow first-time buyers to borrow up to four times their income, an increase from 3.5 times set in place following the housing bubble fiasco of 2008.

I appreciate that for those looking to buy a house in the current market, this represents an opportunity to finally get on the property ladder and is welcome support.

However, the reality is, it is these extended credit facilities that have driven house prices higher over the last 30 years. Creating financial mechanisms to allow home buyers to tie themselves to more and more debt is not the solution that is needed.

Imaginary Wealth

Wage increases are not the factor driving the housing market to 'unaffordable' prices. Our new-found ability to justify these surging prices is thanks to some banking wizardry.

Longer mortgage terms and lower and lower interest rates have ensured that monthly payments are as affordable as they have ever been.

Yes, €500,000 is a sizeable mortgage, but if you spread it out over 35 years at historically low-interest rates, suddenly it seems justifiable, manageable even. The bidder most willing to shackle themselves to this life sentence 'wins'.

But what happens as interest rates rise? The very thing we thought we could afford is no longer affordable as the terms of the deal change.

All this credit in the system stops working when the cost to borrow starts to increase. We no longer can afford the things we thought we could afford. The imaginary wealth we thought we had, disappears.

And yet the solution from the Central Bank is to allow more leverage in the system in a rising interest rate environment.

Can't afford a home?

Not to worry, we will just lend you more money so we can prop up this house of cards just a little longer.

Pumping more money into an already inflationary environment does the exact opposite of what is needed. Instead of addressing supply issues and regulatory issues, they continue to focus on mechanisms to help justify current prices.

The Root of the Problem

Increasing the leverage in the system just kicks the can down the road. Currently, the data shows that home sales are slowing dramatically in the face of higher interest rates and a slowing economy. We are in the middle of a stand off between buyers and sellers. Buyers who can't afford to purchase at current prices as interest rates rise and sellers who don't want to sell at a price lower than their neighbour sold for.

Instead of leaving the market dynamics of supply and demand play out, allowing some downward pressure on house prices, the Central Bank has thrown a bone to sellers and disguised it as a benefit for buyers. They hope that this attempt to 'help' buyers stretch just a little further will be enough to keep the wheels turning. It won't.

Once Again

Allowing more leverage in the system to help justify higher and higher prices is not the answer. Doing it in the face of inevitably higher interest rates is simply thoughtless.

We simply didn't build enough homes following the last housing crash to meet the demand coming from millennials reaching their household formation years.

Perhaps addressing this generationally undersupply would be a more worthwhile endeavour instead of extending lines of credit, the very thing that facilitated this price surge in the first place.

Just a thought.

To learn what companies to invest in, and for direct access to my personal investment portfolio, go to www.theislandinvestor.com.

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Funding sought for Glebe Craft Quarter

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Funding sought for Glebe Craft Quarter


Plans to redevelop Killarney’s town centre laneways remain on hold as local authority officials seek capital funding to progress the scheme.


At Wednesday’s meeting of the Killarney Municipal District, Councillor Niall Kelleher raised the future of the urban regeneration project, asking the council: “That Kerry County Council provide a detailed update on the proposed development of the Glebe Craft Quarter in Killarney, including the Glebe, Bohereencael, Milk Market Lane and Old Market Lane areas, outlining the work completed to date, estimated project cost, funding secured or being sought and the anticipated timeframe for implementation.”
In a written reply, Kerry County Council revealed that no dedicated capital has yet been assigned to deliver this phase of the public realm plan.
An official response stated: “At present, there is no identified funding stream for this phase of the proposed public realm works. The project will be considered as part of future funding applications, and Kerry County Council will continue to explore all available funding opportunities to support its delivery.”

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Call for urgent child protection funding at Killarney conference

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Call for urgent child protection funding at Killarney conference


Frontline child protection and welfare services are facing an unprecedented crisis due to a surge in cases and limited resources, key speakers warned at a national conference in Killarney on Wednesday.

NO FEE PIC PIC JULIEN BEHAL Dr Aisling Parkes, Special Rapporteur on Child Protection and Senior Lecturer in Law at UCC; Julie Ahern, Legal, Policy and Services Director at the Children’s Rights Alliance; Seamus Whitty, Chief Executive Officer of Kerry Community Youth Service; and Kate Duggan, Chief Executive Officer of Tusla, pictured at Kerry Community Youth Service (KCYS), Killarney, at the closing event of the Children’s Rights Alliance’s End Child Poverty Week 2026.


The final event of National End Child Poverty Week took place at the KCYS Youth Centre in Killarney, bringing together child welfare experts, legal professionals, and social workers to examine child protection, welfare, and alternative care.
Addressing delegates ahead of Budget 2027, Tanya Ward, Chief Executive of the Children’s Rights Alliance, warned against proposed spending cuts across government departments that deliver core family supports.
“For politicians to speak about their prioritisation of the protection and safety of children in recent weeks, while at the same time committing to levying the Departments that deliver those protection, welfare and family support services is just not right,” Tanya Ward said. “The levies, which are intended to shoulder an ‘overspend’ by the department of education through cuts across other departments, could not come at a worse time. They essentially ask critical services to children to pare back, to do more with less – at a time when these services are completely stretched thin trying to meet the demand for support.”
Figures released at the conference revealed that referrals to Tusla, the Child and Family Agency, have doubled over the past decade. The agency received a record 106,444 referrals in 2025. That upward trend has continued into 2026, with 28,800 referrals logged in the first three months of the year—an 11 per cent increase compared to the same period in 2025.
“Tusla and its support services are the last safety net for vulnerable children and families,” Tanya Ward added. “We need to be seeing significant increased investment to ensure we have a child protection system that is fit for purpose and can meet the needs of the children behind these figures who are facing battles such as neglect, emotional, physical or sexual abuse, trauma and deprivation.”
Chaired by Julie Ahern, Director of Legal, Policy and Services at the Children’s Rights Alliance, the conference featured keynote contributions from Kate Duggan, Chief Executive Officer of Tusla, and Dr Aisling Parkes, Special Rapporteur on Child Protection and Senior Lecturer in Law at UCC.
Additional speakers included Denise Kirwan, Partner at Comyn Kelleher Tobin Solicitors; social worker Thomas O’Driscoll; Seamus Whitty, CEO of KCYS; and Sinéad Roe, Intensive Family Support Co-ordinator at KCYS.
The Children’s Rights Alliance is calling on the Government to deliver a dedicated “Children’s Budget” for 2027. Key demands include increasing Tusla’s overall funding to expand social work staff across 30 new network areas, funding the rollout of the forthcoming National Policy Framework on Alternative Care, and increasing the proportion of Tusla’s budget directed to early intervention and community family support by three percentage points annually over five years.

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