Banks expected to loan €9bn to homebuyers this year
Buoyant sales of goods and services abroad and expanding multinational employers expected to boost Republic’s economy in 2020
House price inflation slowed through 2019 to 0.9% in October as the Central Bank tightened the rules governing mortgages and uncertainty grew over the UK’s plan to leave the EU. Photograph: Getty Images
Banks will loan €9 billion to homebuyers this year, according to one expert, who predicts that the Republic’s economy will grow strongly in 2020.
Buoyant sales of goods and services abroad and expanding multinational employers will boost the Republic’s economy in 2020, according to Conall MacCoille, chief economist at Dublin stockbrokers Davy.
Mr MacCoille notes in the Davy Irish Economic Forecast, published on Monday, that mortgages continued to grow last year. “In the first three quarters of 2019 mortgage lending was €6.7 billion – up 11.3 per cent on 2018.”
The economist adds that Davy expects new lending will come to €10.7 billion in 2020.
The forecast calculates that borrowers will spend €9 billion on buying homes, while remortgages and top-up loans will account for €1.7 billion.
The new home loans will bring to €93.2 billion the total that people in the Republic will owe in mortgages. That figure will be 0.2 per cent ahead of the €93 billion reached in 2019. Davy expects repayments this year to total €8.8 billion.
Mr MacCoille suggests house prices could rise by more than his firm’s 2 per cent forecast this year if the “top end of the market benefits from reduced Brexit uncertainty”.
House price inflation slowed through 2019 to 0.9 per cent in October as financial services regulator the Central Bank tightened the rules governing mortgages and uncertainty grew over the UK’s plan to leave the EU.
However, Mr MacCoille says that consumer confidence has rebounded since the October 31st “deadline” for Brexit passed.
He says the Republic’s gross domestic product (GDP), the value of the goods and services produced here, will grow 5.5 per cent this year, while it is likely to have expanded by 5 per cent in 2019.
Davy originally expected growth this year to reach 5 per cent, but the Republic’s strong exports prompted the firm to increase this.