Similarly, close to 1 in 3 new mortgages issued in the period between 2004-7 were originated with loan-to-value ratios greater than 90%. By contrast, over the past four years the equivalent share has been less 0.5%. So new borrowers now have higher levels of housing equity, providing greater cushions against the risk of house price falls.
The Central Bank’s macroprudential mortgage measures – our limits on how much people can borrow relative to their income, and how much of a deposit people must put down when purchasing a home – have played a key role in delivering that outcome. These measures – introduced in 2015 – were our first macroprudential intervention.