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Mortgage approvals up 48pc in year

Tuesday, August 05 10:51:49

There was continued momentum in the mortgage market in June, according to the latest data from the Irish Banking Federation this morning.

In June, the number of mortgage approvals increased by 48pc compared to the same month a year ago, with the value of approvals up by 57pc on the same basis, the figures show.

In the second quarter, the number approvals grew by 41pc annually (it was up 52pc annually in the first quarter) with the value of these approvals ahead by 49pc (up56pc annually).

While this represents a slowdown in the rate of growth from Q1, this was to be expected due to weak base effects in Q1 2013, according to Dermot O'Leary of Goodbody Economics.

In volume and value terms, mortgage approvals in Q2 were at their highest level since the series began in January 2011.

"A gap still exists between approvals and drawdowns, but results from Bank of Ireland and AIB last week indicated that there has been a large increase in gross mortgage lending in the first half of the year (market data will be published next week)," Mr O'Leary said.

"AIB stated that gross mortgage lending increased by 34pc yoy in H2, while Bank of Ireland, reported growth of over 40pc yoy. The strong trend in approvals in Q2 suggests that mortgage lending will also grow strongly in H2. Gross mortgage lending amounted to E2.5bn in 2013, well short of what we believe to be a 'normal' level of around E8bn. We expect growth of over 30pc this year, which will go some way towards returning new lending to these normal levels," he added.

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