Mortgage drawdowns drop 20% as rates remain elevated 

Brian Hayes, Chief Executive at the Banking & Payments Federation Ireland, said concerns remained over the level of housing supply

A decrease of 19.8% in volume and 17.7% in value was recorded year-on-year.

New mortgage data from the banking industry has confirmed a slowdown in lending in the first three months as borrowing costs remain at elevated levels.

According to the Banking & Payments Federation Ireland (BPFI), a total of 8,419 new mortgages to the value of €2.4bn were drawn down by borrowers during the first quarter of 2024. 

This represents a decrease of 19.8% in volume and 17.7% in value on the corresponding first quarter of last year. The number of mortgages approved in March fell by 16.4% year-on-year.

First-time buyers (FTB) remained the single largest segment at over 60% while the amount of re-mortgaging or switching fell by 59% year on year.

The average mortgages on second-hand properties for both FTBs and mover purchasers reached their highest levels since the data series began in 2005 at €274,535 and €327,069 respectively. 

The first three months of this year was the 33rd consecutive quarter in which the average FTB mortgage on second-hand properties had increased in year-on-year terms.

Brian Hayes, Chief Executive at the BPFI, said there was an overall slowdown in mortgage drawdowns with a drop in both volume and values across all mortgage categories. 

"This was driven largely by switching which was down by more than half," he said. "Despite the overall decline in activity, mortgage demand remains strong. 

"There were 15,297 applications to the Revenue Commissioners for the Help to Buy scheme in the first quarter of 2024, an increase of almost 60% compared with the 9,585 applications made in the first quarter of 2023."

However, he said concerns remained over the level of housing supply. "Recent reports have pointed to a shortage of supply of second-hand homes for sale and the Central Statistics Office reported a 2.6% year-on-year drop in sales of second-hand properties to households in the first two months of this year.”