Mortgage lending grew again in the third quarter of the year, with activity up by 12.5 per cent in the year to September 2013 for the third quarter of consecutive growth. First-time buyers and those trading up continue to dominate the market, accounting for 86 per cent of all mortgages issued.
From July to September, some 4,483 mortgages valued at €750 million were issued, up by 38.8 per cent by number, and by 44.8 per cent by value, since the second quarter. This is only the second quarter since the fourth quarter of 2010 that the volume of mortgages drawn down has exceeded 4,000 and the second quarter that the value of loans has exceeded €700 million. However, lending remains subdued when compared with the boom years - in the third quarter of 2006 for example the number of loans issued stood at 54,623 with a combined value of €10,962 million.
Over 90 per cent of new mortgage credit is now going to home purchasers and the average loan size in the third quarter was €167,276, up 4.4 per cent quarter-on-quarter and 0.4 per cent year-on-year.
Noel Brett, IBF chief executive said that the figures are an indicator "of renewed borrower confidence and activity in the mortgage market".
“ We will be looking closely at both mortgage approvals and drawdown activity over the final quarter of the year for on-going signs of market strengthening; and it remains to be seen how such factors as supply shortage and rising prices in certain locations will impact on the trend,” he said.
Rachel Doyle, chief operations officer with PIBA, the country’s largest group of financial brokers, welcomed the increase but noted that in a properly functioning mortgage market lending on an annual basis should be of the order of € 10 billion.
“Today’s figures are way off that level with less than € 2.6 billion in lending over the year to the end of September. While that has to do with a lack of lending, another contributing factor is the lack of available properties,” she said, adding that demand for mortgages has been consistent and strong for some time with more than one in every two brokers experiencing an increase in demand for mortgages. She called on the Central Bank “to encourage greater competition in the Irish lending market.”
