Mover mortgage approvals decline in May amid shortage of second-hand homes

A further decline in the number of mover-purchaser mortgages — loans to homeowners looking to buy and move into a property — approved in May has implications for the already tight supply of second-hand homes coming to the market, the Banking and Payments Federation of Ireland (BPFI) has said.

Published on Friday, new figures for the banking sector lobbying group also point to high levels of activity in the first-time buyer (FTB) market despite a decline in the volume and value of mortgages approved for prospective homeowners from May 2023.

A total of 4,559 mortgages were approved in May 2024, the figures reveal, an increase of 7.5 per cent in volume terms year-on-year. The value of mortgages approved in the month declined 2.2 per cent from May 2023 to €1.37 billion.

FTBs remained the most active cohort in the market, accounting for more than 62 per cent of total approvals in May despite a 10.3 per cent decline in approval volumes from May last year, the BPFI said. Despite the drop-off, activity in this subsection of the market remains “robust”, said BPFI chief executive Brian Hayes.

Patrick Coveney’s SSP subject to short bets on share price

---

It’s had a €1.4bn Olympic clean-up, but the Seine is still too polluted to swim in

---

Pay off your credit card, invest in your pension - here’s what you can do with your monthly mortage savings

---

Women filling majority of new jobs in Irish economy - and trend is only going one way

---

He said the year-on-year drop in the number of mortgages of approved partly reflects the fact that May 2023 was the “strongest month on record” for FTB approvals. “May 2024 saw the fourth highest FTB mortgage approval levels since the data series began in 2011,” said Mr Hayes.

Jack Chambers: what to expect from the youngest Minister for Finance since Michael Collins

Listen | 35:34

Mover purchase mortgage approvals, meanwhile, continued to decline, dropping 5.1 per cent from May last year to 980 last month.

“In terms of mover purchasers, activity continues to slow with purchase volumes at just 10,770 approvals in the twelve months ending May 2024, the lowest annualised level of mover purchase volumes since the twelve months ending November 2020,” said Mr Hayes. “This has ongoing implications for the supply of second-hand homes to the market which has been shrinking in recent months according to industry sources.”

Mortgage brokers have previously warned the shortage of available properties for purchase was dragging on drawdown activity and mortgage applications. Despite an increase in the number of housing completions in recent times, house price inflation has accelerated this year amid what industry sources have described as a chronic lack of second-hand homes for sale.

Since the start of the year, there have been consistently fewer than 12,000 second-hand homes available to buy, according to online property website Daft.ie’s latest housing market report. The only other time the market has been as tight, in a series of reports extending back to 2007, is the period January-May 2022.

Against this backdrop, asking prices rose at an annual pace of 6.7 per cent in the second quarter of the year, as demand continues to far outstrip supply.

The latest official house price figures from the Central Statistics Office show that actual sale prices increased by 7.9 per cent in the 12 months to April, with Dublin prices rising 8.3 per cent and those outside the capital advancing 7.6 per cent.

Separate BPFI data published earlier this month suggested that FTBs are increasingly looking further afield to find a property amid fierce competition for houses and the flexibility of working-from-home in the post-Covid era.

Nearly a quarter of all first-time buyers borrowed against a property in a different county last year, said the BPFI. While the proportion is relatively modest, it has increased from 19 per cent in 2021 with the phenomenon most evident in Leinster, where the first-time buyer’s share of the mortgage market has increased by at least 10 percentage points in nine counties.

• Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
• Join The Irish Times on WhatsApp and stay up to date
• Our Inside Business podcast is published weekly – Find the latest episode here