IRISH BANKS advanced 25 per cent fewer mortgages in the first three months of this year, compared to the same period in 2007, according to the latest report on the mortgage market from the Irish Banking Federation (IBF) and PricewaterhouseCoopers.
The value of new mortgages fell 19.7 per cent to €6.3 billion in the first quarter of this year, compared to the same period in 2007. Total Irish mortgage lending rose to €142 billion in the first quarter.
The number of first-time buyer mortgages was down 45.3 per cent year-on-year, almost double previous reported declines, to 4,329, while the value of first-time home loans fell 38 per cent to €1.09 billion.
First-time buyer mortgages have fallen 61 per cent in number and 54.5 per cent in value since their peak in the final three months of 2005, when 11,284 first-time mortgages worth €2.4 billion were advanced.
Banks provided 28,508 new mortgages in the first quarter of 2008, compared to 38,236 in the first quarter of 2007 and 37,719 in the last three months of last year.
IBF chief executive Pat Farrell said there was still strong demand for mortgages, but that many potential house buyers were delaying their purchases in anticipation of further price reductions.
He said first-time buyers felt that "prices still have further to fall".
First-time mortgages were down 37 per cent compared to the final three months of last year.
Mr Farrell said that while first-time buyer mortgages were down, the size of the average first home loan advanced in the first three months of this year had risen 3.5 per cent. This was because people were purchasing larger properties. Where previously they had bought apartments, they were now purchasing houses.
The level of switcher mortgages, or re-mortgaging, continues to grow and accounts for 26.2 per cent of the market, despite the volume and value of re-mortgaging falling since the final three months of last year.
Switcher mortgages were the only sector of the market to increase in value and volume since the first quarter of 2007.
Top-up mortgages continue to account for the largest number of home loans, with a 31.9 per cent market share, but are the smallest part of the market in value.
Davy Stockbrokers said that it expected gross mortgage lending to decline by 17 per cent this year.
