The annual growth rate of residential mortgage lending reached its lowest level in five years last month, according to Central Bank figures released today.
Residential mortgage lending slowed to 17.9 % in July - down from 19% in June. Image: David Sleator.
According to the bank's monthly report, the annual growth rate of residential mortgage lending slowed to 17.9 per cent in July - down from 19 per cent in the previous month, reflecting the current lack of confidence in the housing market.
The month-on-month increase of €1.6 billion was one-third lower than last year's growth figure for the same month.
The average monthly change for the year to July was €1.4 billion. According to the report, if residential mortgages were to increase monthly by this figure for the remainder of the year, the end-year growth rate would be around 14 per cent.
Total outstanding residential mortgages stood at €133.4 billion in July.
While the level of indebtedness on credit cards saw a sharp drop in May, due mainly to maturing SSIAs, levels began to rise again in July but remained modest at 11. 7 per cent.
The annual growth rate in non-mortgage credit continued to ease, falling to 25.9 per cent last month - down from 26.3 per cent the month before. The fall in this area of lending was largely due to a fall off in lending to the construction industry and real estate sectors - the main drivers of non-mortgage lending.
Lending in this sector remained higher than that of residential mortgage lending, however, as well as private-sector credit, which stabilised at around 20 per cent in the month.
Private-sector credit has been on a downward turn since June last year when the growth rate rose above 30 per cent for the first time since March 2000. Outstanding private sector credit stood at €347.7 billion at the end of July.
The report states that private sector credit total lending by credit institutions in Ireland to non-Government Irish residents increased by €4.9 billion, or 1.4 per cent, in July to €347.7 billion.
The euro reached its highest ever level against the dollar during July and appreciated by 1.5 per cent during that month. The euro was unchanged against sterling but fell 1.8 per cent against the yen.
Exchange rate movements resulted in a 0.6 per cent rise in Ireland's nominal harmonised competitiveness indicator from 106.6 in June, to 107.2 in July.