Final answer:
The Central Bank of Ireland's restrictions on mortgage lending can have several effects on the Irish property market, including reduced demand for property, stabilization of property prices, and impact on new construction.
Step-by-step explanation:
The Central Bank of Ireland's restrictions on mortgage lending can have several possible effects on the Irish property market. These effects may include:
- Reduced demand for property: When the central bank tightens mortgage lending restrictions, it becomes more difficult for potential buyers to obtain loans. This can lead to a decrease in demand for property, which may result in lower property prices.
- Stabilization of property prices: By implementing restrictions on mortgage lending, the central bank aims to prevent the formation of property price bubbles and excessive leverage. This can help stabilize property prices and prevent overheating of the market.
- Impact on new construction: If mortgage lending becomes more restricted, it may affect the ability of developers to secure financing for new construction projects. This can lead to a slowdown in housing construction, potentially affecting the overall supply of properties in the market.