Irish Brokers’ Association chairman predicts mortgage market will reach €10bn

A mortgage industry expert has predicted the new mortgage loans market will reach €10bn a year well before 2020, as Central Bank figures suggest the market is sparking into life.

Michael Dowling, chair of the mortgage committee at the Irish Brokers’ Association, said €7bn in new mortgages will be sold this year and grow in the coming years as more houses are finally built.

A major part of the new lending will be driven by first time buyers and buyers trading up, while demand for buy-to-let or investment mortgages from landlords remains becalmed, he said.

At €449m, the Central Bank said residential mortgage loans posted the largest net increase in the final quarter in 2016 since the depth of the financial crisis in March 2011.

Lending in the quarter was dominated by fixed-rate loans, as some of the small number of banks left in the market promote fixed-rate loans over variable rate loans. Buy-to-let mortgage loans fell sharply in the quarter, according to the Central Bank figures.

Mr Dowling said landlords seeking mortgage loans face steep loan-to-value conditions and high mortgage rates.

“It (buy-to-let) is still a very small market,” he said.

On the market overall, Mr Dowling said expectations the new mortgage market would be worth €10bn a year by 2020 would be reached sooner.

“If there were more new homes, it would be greater still,” he said.

And the market is still far from normal with transactions of existing housing stock still at relatively low levels, he said.

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