tag:blogger.com,1999:blog-8817171247555815363.post3790120697707605824..comments2024-03-26T05:57:44.937+00:00Comments on True Economics: Can lower interest rates spur housing market growth?TrueEconomicshttp://www.blogger.com/profile/07350536454228478974noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8817171247555815363.post-60747970153506894022009-01-04T22:14:00.000+00:002009-01-04T22:14:00.000+00:00One msjor problem arises in the spreads at which b...One msjor problem arises in the spreads at which banks can borrw and the rate at which they lend. For mortgages, that spread is extremely high almost everywhere in the world. Combioned with tightening mortgage lending criteria required for securitisation and you will see a complete meltdown in property prices over 2009. Any policy initiatives in this scenario are likely to make the problem worse by encouraging irresponsible lending with very high profit margins for the banks, if they can securitise their loans.....big bad circle developing where current policy thinking is part of the problem, not the solution. Any bailout money for the financial institutions coming from Government would be better spent on matches and petrol so that the oversupply of housing in Ireland can be dealt with in an efficient manner.Unknownhttps://www.blogger.com/profile/04060299433246012328noreply@blogger.com