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Written Answers - Personal Debt

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 60.  Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  if his attention has been drawn to the fact that analysis of mortgage data conducted by the Central Bank of Ireland indicates that up to 46% of mortgages were in negative equity at the end of 2011; his views on the implications of this for the wider economy; and if he will make a statement on the matter. [7447/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I note that the Central Bank, in its January 2012 Quarterly Bulletin, published a paper by economists in the Bank on “The Irish Mortgage Market: Stylised Facts, negative Equity and Arrears”. This paper, which is based on research material previously released by the Bank at a Conference it held on the Irish mortgage market last October, provides very useful and detailed data on the Irish mortgage market, including the value of mortgages in negative equity. From an economic perspective, negative equity is an issue of some concern not least because it can act as a barrier to labour mobility and weigh on peoples’ willingness to consume. For these very reasons, we have taken steps to encourage the domestic economy, such as the Jobs Initiative which focused on sectors such as tourism. Indeed, the Government has sought to address the necessary ongoing repair of our public finances in a manner that is the least damaging to the economy. Furthermore, yesterday’s Finance Bill provided for an increase in the rate of mortgage interest relief to 30% for those who bought during the period 2004-2008.

Question No. 61 answered with Question No. 55.

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