Big jump in mortgage drawdowns as approvals also leap

Some 9,625 new mortgages to the value of €2.23 billion were drawn down by borrowers in the second quarter, new figures show.

This represents a 45.4 per cent rise in volume and a 52.5 per cent increase in value versus the same period a year earlier.

On a month-by-month basis, volumes rose 5.9 per cent with values increasing by 4.1 per cent.

The data, which has been compiled by Banking and Payments Federation Ireland (BPFI), indicates that first-time buyers remain the largest single segment, representing 50.9 per cent of all new mortgages agreed.

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In the second quarter, there were 7,438 mortgage drawdowns for purchases valued at a combined €1.8 billion. Such drawdowns were up 47.8 per cent compared to the same three months in 2020.

Residential investment letting mortgages increased 60 per cent year-on-year to 248 while remortgage/switching drawdowns jumped 35.7 per cent to 1,519. The number of top-up drawdowns also rose, up 43.4 per cent to 668.

Approval activity

Supplementary figures from BPFI show 5,204 mortgages were approved last month, that were collectively valued at €1.27 billion. Approval activity was up 129.9 per cent in volume terms versus the same quarter in 2020. In value terms, approvals were up 138 per cent.

There were 4,167 approvals for new mortgage purchases valued at a combined €1.06 billion.

This marks a 146.9 per cent year-on-year rise in terms of volume and a 159.1 per cent jump in value.

First-time buyer approval volumes were up 160.2 per cent to 2,755 while mover mortgages increased by 128.5 per cent to 1,273.

Residential investment letting approvals rose by 93.1 per cent in volume terms to 139.

Remortgage/switching mortgage approval volumes rose 66 per cent year-on-year to 707 while the number of top-ups granted increased by 120.8 per cent to 329.

Housebuilding bounce

Separately, a report from Goodbody showed that Irish housebuilding activity bounced back strongly following the prolonged lockdown at the start of the year.

Its analysis of Building Energy Ratings (BER) statistics suggests a 39 per cent year-on-year increase in housing completions in the second quarter. However, relative to the second quarter of 2019, completions are estimated to have been 7 per cent lower.

A more notable development is the surge in housing starts in April and May, which highlights the current strength in the demand for housing.

Dublin was the worst-performing region in terms of home completions, according to Goodbody chief economist Dermot O’Leary. While estimated to have grown by 35 per cent year on year, completions were 24 per cent lower than in the second quarter of 2019.

Construction activity has bounced back strongly after all residential projects were allowed to reopen on April 12th, according to an analysis of data by GeoDirectory. It classified 18,911 buildings as being under construction in June 2021, equating to a 38.4 per cent rise on a year earlier.