The renewed momentum in the Irish housing market in the early stages of 2017 is set to continue according to new data published this morning by the Banking & Payments Federation of Ireland.
In terms of drawdowns, new mortgage lending grew by 39% yoy in Q1 in value terms (+26% yoy in Q4 2016). This was made up of a 27% yoy increase in the number of mortgages (+14% yoy in Q4 2016) and an 9% yoy increase in the average loan size.
Drawdowns for first-time buyers (+40% yoy by value) and mover-purchasers (+36% yoy by value) grew at a similarly strong paces, with buy-to-let lending continuing to be relatively moribund (14% yoy). Remortgaging activity continues to grow (+69% yoy). Top-ups grew by 29% yoy. It is now likely that Goodbody's €7bn lending forecast for the full-year in 2017 will be exceeded.
Mortgage approvals data for March have been published, suggesting that momentum is accelerating in the mortgage market. The number of approvals grew by 87% yoy in March, with the value of approvals more than doubling (+103% yoy). All categories saw exceptional growth in March.
Approvals for FTBs (+113% yoy) and mover-purchasers (+87% yoy) continue to surge and account for the lion’s share (86% of the total in the last three months). Approvals for BTL mortgages more than doubled (+130% yoy), as did top-ups (+138% yoy).
According to Goodbody Stockbrokers, "The biggest issue in terms of these approvals translating into drawdowns is the low level of new supply. If one takes the sum of approvals for FTBs and investors (i.e. new entrants to the market), this amounts to c.20,000 over the past twelve months.
They added, "This is substantially more than the amount of new properties that will come to the market this year (completions forecast is 18,500 but a significant proportion of these will be self-builds), thus the obvious conclusion is that prices will continue to be bid up."