Number of mortgages falls 60% compared with 2008

THERE was a near60% drop in the number of mortgages granted in the Irish market last year, with just under 46,000 home loans issued against a figure of more than 110,300 in 2008.

In value terms, the aggregate value of issued mortgages in 2009 amounted to just over €8 billion. This was back in line with the €8.3bn lent to house buyers in 2007, but considerably down on the €23bn lent in 2008.

The new figures, published yesterday in the latest quarterly mortgage market profile jointly produced by the Irish Banking Federation (IBF) and PricewaterhouseCoopers (PwC), also showed the final quarter of last year saw an 18.4% year-on-year drop in mortgage volumes to 9,946, while average values of individual mortgages are now back to 2005 levels.

Commenting on the results of the latest edition of the report, IBF chief executive Pat Farrell, said: “The data illustrates how difficult a period 2009 was for the mortgage market, but there have also been some reassuring signs of late, most notably, the ever-increasing share of the overall market accounted for by home purchasers and the moderation, evident over recent quarters, in the overall rate of decline in market activity.”

Mr Farrell said consumer confidence conditions, unsold housing stock, house price movements and the general health of the economy will all influence mortgage market activity this year.

In terms of market trends, first-time buyers now make up the largest section of the market. Although the fourth quarter of last year saw a like-for-like decline in the number of mortgages issued in all market segments, with a 3.4% fall, first-time buyers witnessed the smallest annualised fall.

The latest figures have first-time buyers upping their share of the loan volume market by over 5% to 35.3% and now commanding over 41% of the market.

In all, as much as 70% of the Irish mortgage market is now accounted for by home purchaser segments rather than residential investors.

In further reaction to the overall fall in mortgage lending last year, the Professional Insurance Brokers’ Association (PIBA) called it “alarming” and proof that the banks “are not functioning as they should“, while the Irish Brokers’ Association said the figures are symptomatic of the confusion in the marketplace at present.

“People are deterred from even applying for mortgages at the moment, as they feel that no one is being accepted,” said Irish Brokers Association chief Ciaran Phelan.


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