Growth in loans to homebuyers fell to its lowest point in over a decade, the Central Bank reported today.
Residential mortgage lending continued to slow in August dropping to 17.0 per cent from July's 17.9 per cent. That was the lowest point since June 1997 when the rate of growth stood at 14.6 per cent.
The monthly increase (inclusive of securitised residential mortgages) of only €1.3 billion in August was below the average increase of €1.6 billion recorded during the months of May to July, the bank said.
"However, mortgage borrowing in August is traditionally below average," the bank added of a month when many people are on holiday and property market activity is typically subdued.
Private sector credit growth in Ireland dipped to 20.1 per cent last month from an annual rate of 20.3 per cent in July and was broadly in line with the three-year low of 20.2 per cent recorded in June, the Central Bank said.
A month-on-month rise of €4.0 billion was slightly below an average monthly increase of €4.2 billion so far this year and took outstanding borrowing levels to €351.7 billion.
Annual growth rates had been falling steadily after peaking at 30.3 per cent in June last year, depressed by an end to Ireland's decade-long property boom.
The increase in non-mortgage credit slowed to 25 per cent year-on-year from 25.9 per cent in July as the bank pointed to muted lending to non-financial corporations in July and August when average monthly increases of around €1.5 billion were about half the size of those seen between March and June.
"Some of the slowdown can be explained by lower lending to the construction and real estate sectors, reflecting a marked reduction in construction activity during the summer months, possibly exacerbated by bad weather," the bank said.
The annual pace of growth in outstanding credit card debt held steady versus July at 11.7 per cent as a decline in payments received was offset by a fall in the amount of new spending.
Funds provided by the bank as part of the European Central Bank's monetary policy operations fell by €1.8 billion in August to €20.1 billion with a drop in main refinancing operations of €3.6 billion partially offset by an increase in longer-term refinancing operations of €2.0 billion.
Credit institutions in Ireland accounted for €235.1 billion of the euro zone's broad money supply in August, a monthly rise of €1 billion or 0.4 per cent.