Mortgage lending grew at its slowest pace in 16 years in April due to rising borrowing costs and falling property prices, Central Bank data released today showed.
Home loans rose by 11.4 per cent in the month, compared with the same month the previous year, a fall from the 11.6 per cent growth recorded in March. This is the slowest growth rate since May 1992.
The bank said that after very weak mortgage lending growth in January and February the increase in home loans continued above the €1 billion mark in April, which was reached in March.
This brought the overall mortgage loan book to €143.4 billion.
Private sector borrowing rose by just under €2 billion or 15.9 per cent in April, bringing the average monthly change rise this year to date to €2.4 billion, compared with an average monthly growth of €3.5 billion during the first four months of 2007.
The bank notes that although private debt grew in March "the overall trend is one of decline". It said the moving average peaked in June 2006 and has fallen in each subsequent month to reach 16.2 per cent in April.
Non-mortgage debt growth rose to 19.3 per cent from 20.8 per cent in March.
Indebtedness on credit cards rose by 7.2 per cent year-on-year in April, down from 8.6 per cent.
The bank noted that while the annual rate of increase fell in April, the month-on-month increase in outstanding indebtedness of 2.1 per cent was the second-highest in 12 months, after December which traditionally records the highest month-on-month increase.
