More than 8,000 new mortgages were drawn down in the third quarter, up 19.6 per cent compared to the previous three months and by 13.7 per cent on an annual basis.
New figures from the Banking & Payments Federation Ireland (BPFI) also show the number of mortgages approved by banks rose by 26.5 per cent year-on-year but were down 0.4 per cent on a month-on-month basis.
A total of 8,133 new mortgages to the value of €1.56 billion were issued to borrowers during the July-September period, according to the data.
The value of new home loans issued rose by 21.1 per cent against the second quarter and by 16.7 per cent compared to the third quarter of 2015.
First-time buyers accounted for 48.6 per cent of all mortgages drawn down during the quarter, the data shows.
The volume and value of switcher mortgages continued to increase strongly, albeit from low levels. Some 674 re-mortgage loans were drawn down in the third quarter to the value of €142 million. This represents a 103.6 per cent rise in volume and a 90.7 per cent jump in value.
A total of 3,399 mortgages were approved each month during the third quarter on average. Almost half of approved loans (1,605 mortgages) were for first-time buyers, with mover purchasers accounting for 32.5 per cent.
The value of mortgage approvals per month on average in the quarter under review was €677 million, of which €307 million was for first-time buyers and €267 million for mover purchasers. The value of approvals was up 2 per cent year-on-year, but down 0.7 per cent on a month-on-month basis.
BFPI said both re-mortgage and top-up mortgage approvals grew over the last 12 months with re-mortgage (or switching) activity almost doubling in that period and rising by almost 9 per cent month on month in both volume and value terms.
Bounce back in lending
Goodbody said the latest figures showed the bounce-back in lending and approvals was continuing with economist Dermot O’Leary predicting an end to a 9-year deleveraging period in 2017.
Following publication of the latest figures, Goodboy said it was increasing its mortgage lending forecasts.
The stockbroker said it now expects gross lending of €5.7 billion for 2016, as against a previous €5.2 billion estimate. It also forecast €6.7 billion in lending for next year, as against an earlier forecast of €6.1 billion.
Investec’s chief economist Philip O’Sullivan said that, while the data remains consistent with the steady growth of new lending within the mortgage market that has been seen over the last two years, it comes from a low base.
“Total lending is likely to register around €5.5 billion for 2016, well below the €8 billion to €1 billion level that we would view as ‘normalised’ for an economy the size of Ireland’s,” he said.
“Given the still anaemic levels of new housing supply coming out of the construction sector, and still onerous Central Bank of Ireland mortgage lending restrictions, we do not expect new mortgage lending to hit this €8 billion-€10 billion level until 2019, though the package of housing market measures announced in Budget 2017 earlier this month, including the controversial help-to-buy scheme, may support this endeavour slightly,” Mr O’Sullivan added.
