Irish mortgage lending dropped 71 per cent in the second quarter as falling house prices, stricter lending rules and rising unemployment deterred buyers.
The value of lending fell to €2.17 billion in the three months through June from €7.57 billion a year earlier, the Irish Banking Federation said in a report today.
The volume of home loans dropped 64 per cent. The economic slump has pushed unemployment to a 14-year high, undermining consumer confidence.
House prices have fallen more than 22 per cent from their January 2007 peak, while banks have applied tougher conditions on loans as risks increase and access to funding remains difficult.
“The overall level of mortgage activity continues to reflect the very challenging economic environment,” IBF chief executive Pat Farrell said in the report.
“The investment end of the market continues to show the greatest decline.”
The volume of mortgages to first-time homebuyers fell 48 per cent in the second quarter from a year earlier and the volume to investors dropped 79 per cent, the report said.
First-time buyers accounted for 25 per cent of all new mortgages issued in the quarter.
By volume, overall mortgage lending rose 15.4 per cent in the second quarter compared with the first three months of the year, which the federation said is the seasonal pattern.
Bloomberg