Mortgage lending growth continues to accelerate, according to new Central Bank figures, and is now running at a rate last seen in 2000. The amount of outstanding mortgages continues to accelerate, despite slower economic growth and warnings that house prices have peaked.
The annual growth rate of mortgage lending was 24.8 per cent in October, up from 24.7 per cent the previous month. Borrowing growth in other areas also accelerated, with total private sector credit rising by 16.9 per cent, up from 14.7 per cent the previous month.
The strong growth in non-mortgage lending may be an indicator of improving confidence amid signs of economic recovery.
Another €1.1 billion in mortgages were extended in October, bringing the total to €51.75 billion. The annual rate of mortgage lending growth has exceeded 23 per cent in every month this year and has accelerated close to 25 per cent over the September-October period - one of the peak times for home purchases.
The Central Bank has expressed concern about the rate of mortgage lending growth and the Irish Financial Services Regulatory Authority (IFSRA) has been in touch with some lending institutions, asking them to tighten their lending criteria.
However, despite this, mortgage lending growth continues to accelerate to a level last seen at the peak of the boom in 2000.
Two reports this week - one from the OECD and one from Davy Stockbrokers - have both warned of the danger of falling prices.
However, the figures suggest that mortgage borrowing remains at an extraordinary high rate, probably fuelled by the high level of housing completions this year and the resulting demand from first-time buyers.
Notably, lending in other areas is also picking up, pushing total credit growth to 16.9 per cent, its fastest rate since early 2001. Total lending stands at €155.8 billion, a monthly increase of 1.4 per cent.
Outside mortgages, the main areas of growth were term/revolving loans, up €732 million to €57.4 billion, and repurchase agreements, which totalled €536 million during the month after hardly any such agreements were concluded the previous month.
