Year-on-year increase of 26.1% in value of mortgages issued in Q4

First-time buyers remain the single largest segment by volume

First-time buyers remain the single largest segment by volume (46.5 per cent) and by value (44.6 per cent)

First-time buyers remain the single largest segment by volume (46.5 per cent) and by value (44.6 per cent)

 

Irish house buyers drew down €1.81 billion worth of mortgages during the fourth quarter of 2016, representing a year-on-year increase of 26.1 per cent, according to new figures.

Some 9,115 new mortgages were drawn down by borrowers from October to December, which is the highest number since the fourth quarter of 2009.

The figures from the Banking & Payments Federation Ireland’s (BPFI) Mortgage Drawdowns report, which was published on Thursday, also show there was a year-on-year increase of 14 per cent in the volume of mortgages.

Compared to the third quarter of 2016, there was an increase of 12.1 per cent in the number of mortgages issued. There was also an increase of 16.4 per cent in value.

A total of 29,498 mortgages to the value of €5.66 billion were issued in 2016.

First-time buyers remain the single largest segment by volume (46.5 per cent) and by value (44.6 per cent). Together, first time buyers and mover-purchasers accounted for 84 per cent of the total value of mortgages drawn down.

The volume and the value of re-mortgage loans (switching) continued to increase, albeit from low levels. There were 851 re-mortgage loans during the quarter to the value of €191 million.

This reflects an increase of 26.3 per cent in volume and 34.3 per cent in value on the previous quarter and year-on-year growth of 75.4 per cent in volume and 62.3 per cent in value.

Goodbody analyst Susie Crawford said the figures indicate “further evidence of strong momentum” in the housing market.

“With strong approvals data and healthy interest among first time buyers in the Government’s Help-to-Buy scheme, this bodes well for continued growth in 2017.”

The first time buyers cohort “looks set to grow further in 2016 with additional impetus likely to be provided by the HTB scheme”, she said.

“There were solid increases across almost all borrower cohorts. Surprisingly, the buy to let mortgage market remains subdued (-0.2 per cent year-on-year) but it is worth noting that cash transactions remain a large part of this segment.

“Today’s data shows that the mortgage market in Ireland is seeing continued strong growth as the household deleveraging phase comes to an end.

“We see a bumpier year ahead with a robust labour market and looser macro prudential rules contributing to increasing house prices (we forecast an 8 per cent increase for 2017). Our forecast is for gross mortgage lending of €7 billion in 2017.”