Average Irish mortgage drawdowns hit a record of almost €328,000 in the first three months of the year, according to figures from the banking industry, as borrowers took on more debt as home prices continued to soar amid a shortage of properties for sale.
This was driven by a 9.6 per cent annual rise in loans on second-hand properties, to €370,790, according to Banking and Payments Federation Ireland’s (BPFI) latest quarterly mortgage drawdowns report, which draws on data going back to 2005.
First-time-borrow mortgages breached the €300,000 level on average for the first time, rising 9.7 per cent to about €302,000 – or more than double the average such mortgages in early 2014, just after the Republic exited an international bailout programme.
The total value of mortgages drawn down during the first quarter rose 19 per cent to €2.81 billion, almost double the pace of the 10.3 per cent increase in new loans, to 9,190, amid ongoing house price inflation.
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Irish home prices rose by 8 per cent in the year to February, according to the latest data from the Central Statistics Office, as home completions and the availability of second-hand homes remain well below demand. House price inflation and mortgage levels would be even higher now, had the Central Bank not introduced borrowing limits a decade ago, according to observers.
New home deliveries amounted to 30,330 last year, far short of the target of the then Fine Gael-Fianna Fáil-led government. The new Coalition, involving the same two parties, has set itself a target of delivering 41,000 homes this year and 43,000 in 2026.
However, the Central Bank, BPFI and a number of economists estimate that completions will continue to fall short of target amid bottlenecks in the availability of land serviced by critical infrastructure, labour and equity funding for small to mid-sized developers.
The Government has identified National Asset Management Agency chief executive Brendan McDonagh to become the State’s new so-called “housing tsar” – or head of the Government’s planned new strategic housing activation office – that would aim to speed up delivery.
First-time buyers remained the single largest segment of the market in the first quarter, accounting for 57.8 per cent of the number of loans drawn down and 59.1 per cent of the value, according to the latest BPFI figures.
Remortgage and switching activity continued a rebound seen in the second half of last year, as many borrowers came off fixed-rate periods and others sought to take advantage of declining interest rates. The European Central Bank has cut its main deposit rate from 4 per cent to 2.25 per cent since last June.
Remortgage and switching volumes and values increased by 18.7 per cent and 30.6 per cent, respectively, on the year in the first quarter.
“The mortgage market continued to demonstrate resilience in the first quarter,” said Diarmaid Sheridan, an analyst with Davy. “Although the market is constrained by supply, strong underlying demand, supportive Government policy and falling interest rates should underpin strong mortgage lending throughout 2025.”
Meanwhile, the BPFI’s latest monthly mortgage approvals data shows that home loan approvals rose by 19 per cent in volume, to 4,492 cases, and almost 30 per cent in value, to €1.43 billion, in March.
“There were 52,021 mortgage approvals in the 12 months ending March 2025, valued at €15.8 billion,” said BPFI chief executive Brian Hayes.
Some €14 billion of this was earmarked for home purchase, with most of the remainder made up of remortgaging, switching and top-ups.
