New data released this morning by the Banking and Payments Federation of Ireland (BPFI) has found that the Irish mortgage market continued its strong growth trend in the second quarter of 2017.
The data shows that the value of mortgage drawdowns rose by 28% year on year (yoy) in the second quarter 2017 (+39% yoy in Q1 2017). This was made up of an 18% yoy increase in the number of mortgages and a 9% yoy in the average loan size.
The latter is in line with the growth in house prices over the period. Goodbody Stockbrokers has today claimed that Ireland is unlikely to make any meaningful revisions to its full-year forecast of €7.4bn on the back of this data.
First-time buyers (FTBs) and mover-purchasers continue to dominate the share of new lending, accounting for 85% of the value of mortgages drawn down in the second quarter. FTB drawdowns grew by 32% yoy in Q2 (+40% yoy in Q1), with drawdowns of mover-purchasers growing by 22% yoy. The fastest growing component of new lending was remortgaging (+43% yoy). It remains a relatively small part of new lending, accounting for 9.4% in Q2.
According to Goodbody Stockbrokers, "Policy efforts such as yesterday’s Central Bank consultation on mortgage switching is likely to lead to further growth in the share of this category. At the peak, it reached 26%, while the current UK level is 28%."
They added, "We believe that a “normal” market amounts to c.€13.5bn but the achievement of this depends on an increase in new housing supply to 30,000 units. There are some early signs that a deficit of available homes may be holding back the move from mortgage approval to drawdown."
Source: www.businessworld.ie