result of brexit could add to demand, although brexit could also have a negative effect, in particular on retail commercial real estate if consumer sentiment is adversely affected. existing commercial real estate exposures leave irish retail banks vulnerable to any change in market conditions. house price growth has been rising steadily since late 2016, while survey data show further price increases being expected over the medium term. high rental growth is also being observed. a scarcity of housing in certain locations is contributing to price and rent developments in the residential property market. there has been a substantial decline in vacancy rates in recent years, particularly in high population growth areas. the number of residential properties listed for sale or for rent is also low. there is some uncertainty surrounding official housing completion data at present but the number of new units being built and likely to be constructed over the medium term is below demand. the central bank introduced macroprudential mortgage - lending requirements in february 2015. the outcome of a review of these requirements was announced in november 2016 and found that the regulatory framework is appropriate and effective in meeting the objectives of the measures, which are to strengthen households ’ and banks ’ resilience to shocks and to curb price - credit spirals in the housing market. we have committed to review the measures on an annual basis. the general government deficit ratio continues to improve and the medium - term deficit target is projected to be achieved in 2018. the public debt burden, at around €42, 000 per person resident in the state, however, remains high by historical and cross - country comparison, leaving the sovereign vulnerable to real economy and financial market shocks. looking at the financial sector, irish retail banks ’ profits, while remaining positive, fell in 2016 as a substantial reduction in the write - back of impairment provisions occurred. operating income increased last year, with the domestic market accounting for almost 80 per cent of revenue. brexit could adversely affect those irish retail banks with a significant presence in the uk. new lending to the uk fell by over 18 per cent in the twelve months to 2017q1, with a drop in uk mortgage lending and exchange rate movements contributing. irish retail banks ’ aggregate loan book has become more concentrated in recent years in residential mortgages and in lending to irish counterparties. developing a sustainable model to address declines in their main income sources and the eventual normalisation of interest rates represents a challenge for irish retail banks. 2 / 3 bis central bankers'speeches the aggregate value of total assets held by

be associated with self - control problems. 3 in addition, households can be overly attached to the status quo and suffer inertia bias, taking default options in financial contracts, failing to switch product or provider even when there are clear benefits to switching. 4 retail investors also tend to follow naive investment strategies rather than identifying superior options. 5 consumers can also exhibit loss aversion bias, meaning that they care more about potential losses than making equivalent gains. 6 the design of financial products and services can serve to ease or exacerbate these biases. in this context, behavioural economics shows that framing matters – put simply, firms can present the same information in different ways and this can lead to different choices by consumers. a key insight from the recent experience with financial crisis and from the growing literature on 1 / 9 bis central bankers'speeches behavioural economics, is that consumers do not always act in their own best interest. in addition, market forces do not always act to reduce consumer mistakes. firms face their own incentives when designing and framing products, and these incentives may not align with the best interests of the consumer. for example, analysis by the office of fair trading in the uk shows that firms can frame prices in a way that plays on consumer biases. 7 empirical research also suggests that firms can choose to market the salient features of products that appeal to consumer biases, while shrouding the less favourable aspects that could alter a consumer ’ s choice to purchase that product. 8 the interactions between misaligned incentives and behavioural biases can adversely affect consumer welfare, and there are many examples of analytical work that highlight such costs. 9 in summary, there is abundant empirical and theoretical research to show that consumers do not always act in their own best interest in making financial decisions and that biases can be exacerbated by the design of financial products. in this context, financial regulation to protect consumers can play a critical role and i would now like to talk to you about the institutional arrangements for the protection of consumers across the globe, and the vision for consumer protection at the central bank of ireland. consumer protection : institutional setup around the world, institutional arrangements in place to protect consumers vary from stand - alone consumer protection agencies to bodies with dual regulation and consumer protection mandates and bodies like the central bank of ireland with financial stability, prudential regulation and consumer protection mandates. 10 measures applied to protect consumers range from working to ensure financial stability, through prudential and macro