Irish people borrowed at record levels last year, with banks lending more than €21 billion in mortgages, it emerged today.
The Central Bank recorded the highest-ever monthly rise in private sector credit, with lenders handing out €6 billion in December, including €3.5 billion for residential mortgages.
This brought the annual increase in credit for 2005 to €59 billion, compared to a rise of €37 billion in 2004. Households and non-financial corporations accounted for €25 billion.
In its December bulletin, the bank reported strong demand for residential mortgages in line with developments in the housing market that saw prices slow in the first six months and accelerate from October.
During 2005, net lending for residential mortgages increased by €21.1 billion, well above the €16.4 billion in 2004.
But the survey revealed banks had reclassified €900 million to residential mortgages last month, which helped to boost the figures.
The bank noted that credit card debt was one of the slowest-growing areas of credit last year. Despite 152,000 new cards issued, outstanding debts rose by only 15.4 per cent during 2005.