The number of mortgage approvals fell by 10% year on year (yoy) in March, according to the Banking and Payments Federation of Ireland (BPFI) data published this morning.
Goodbody Stockbrokers say this reflects the initial effects of the COVID-19 lockdown restrictions in Ireland which began on March 12th. Given that restrictions were only fully tightened on March 27th, the full effects will not be seen until the April data are released.
There are already reports of banks holding off on offering any further exemptions to the Central Bank's LTI and LTV ratios, while over 1m people (c.40% of the labour force) now have a changed labour market status relative to the beginning of March.
This will impact not only the new flow of mortgage approvals but also has implications for those who already have approval as they are obliged to update their status before drawing down the mortgage.
According to Goodbody Stockbrokers, "While we previously expected a mortgage market of c.€10.7bn this year, the lack of activity in the second quarter, the unprecedented shock to demand and supply and a tightening of lending standards will instead result in a large fall in new lending, possibly of the order of 40% for the year overall."