The Irish Banking Federation which claims to represent banks which make up more than 95% of the Irish mortgage market has today issued its new mortgage statistics for Q3, 2010. Here are the highlights
(1) The number of new mortgages for property purchases has increased by 3% from Q2 to Q3, 2010 – some 5,118 new mortgages were advanced in Q3, 2010 compared with 4,947 in Q2, 2010 led by new mortgages for moving home which increased by 10% in volume terms from Q2 to Q3. First Time Buyer mortgage volumes were up by 1% whilst buy to let mortgages were down by 10% and at 254 mortgages signal that this sector of the mortgage market is effectively dead.
(2) The remortgage market and top-up mortgage segments suffered a significant decline with remortgage volumes down 41% from Q2, 2010 to 581.
(3) The value of new mortgage lending for property purchases also increased by 3% from Q2 to Q3, 2010 – €1.04bn of new mortgages were advanced for property purchases.
(4) The average value of a mortgage for a FTB was €189,000 – if that represented a 75% Loan to Value then that would imply the average value of a FTB home of €252,000.
(5) The average value of a mortgage for someone moving home was €234,000 and again at a 75% LTV that would imply an average house price of €312,000.
(6) Whilst new mortgage lending for property purchase increased slightly the drop in remortgage and top-up business led to an overall decline of 6% approx in volumes and values.
(7) Mortgage lending is now 90% off the peak in 2006.
Here are the historical volumes for new mortgage lending with an analysis of movements at the bottom
Here are the historical values for new mortgage lending with an analysis of movements at the bottom
Here are the historical average values for new mortgage lending with an analysis of movements at the bottom – remember that these don’t equate to house values as most mortgages represent a proportion of a property’s value (the “LTV”).
NAMA Wine Lake 
FTBs are taking out approx the same mortgage in Q3 ’10 as they were in Q1 ’05, with Q1 ’08 almost bisecting the period as the highest.
Movers are still paying significantly more, BTL is collapsing, re-mortgages are down and top-ups the same – if you use the same view.
In an article in Q2 ’09 Davey Mac indicated that there was still 50% to go (not saying that Davey is a bell weather but at least he was ringing a bell all along) with house prices.
http://www.davidmcwilliams.ie/2009/05/11/exposing-the-lie-of-the-land
Using,
http://www.cso.ie/px/Doehlg/Database/DoEHLG/Housing%20Statistics/Housing%20Statistics.asp
&
http://www.esri.ie/irish_economy/permanent_tsbesri_house_p/
The Q2 ’09 average national house price was 242k & 241k respectively. 121k at half would time-line prices to Q2 ’98 & Q4 ’98 respectively.
According to PTSB & ESRI
the Q3 ’10 average is 198.6K. It was approx at this value in Q3 ’02 with the peak in Q4 ’06 (310.8K) almost bisecting the time-line.
The last blip on the way up was Q4 ’01 (-3.8K, to 181.8K); will that indicate a false dawn in Q2/3 ’11 before a double dip commences.
The next blip on the way up occurred in Q4 ’96 (-€5, yes a fiver), average value then 79K.
Or put in another way between Q4 ’96 & Q4 ’01 average house values rose by a 2.3 multiple or 130%.
Average house prices at 50% off the peak would time-line to Q1/Q2 ’00 (155K), which would place the bottom in Q3/4 2012.
If you prefer to guesstimate at 60% off peak the trend indicates Q1 ’99 (124K) and the bottom a year further out in Q3/4 2013. All of the above using simple V (well inverted V) graphs.
I can’t see much of a current friend in these trends, its great news if your doing the ‘inter’, by the time you’ve done your leaving you may have the prospects of a job with relatively cheap housing.
Thanks for the comment JR – remember though that these are mortgage figures and not the values of the homes being purchased. In 2005 how many 100% mortgages (or indeed 125% mortgages) were handed out to FTBs that will be lucky to get a 92% LTV mortgage today and more likely will only get a 75% mortgage. So I don’t think you can read anything substantial into house prices from this data. Also at 90% off peak values, that tells us that the market is skewed. I wonder what someone in the business thinks of these figures against their own experience?
Granted, all of this data is based on mortgage draw-downs & the national average. Replace ‘house price’ with mortgage draw-downs in the above.
The on-going ‘correction’ tells us the market was definitely skewed, how far skewed the other way will it go?
One things for sure, of the 289,077 FTB loans draw-down between Q3 ’02 & Q1 ’10 and of the 324,843 second hand home draw-downs in the same period a significant portion must be in negative equity. There seems to be no data relating to how many of the second hand draw-downs paid off a mortgage on a previous FTB or a previous second hand mortgage draw-down, you would have to factor in the ‘average’ time between house moves for the ‘average’ mover in order to get a more realistic no from the approx 613’000 mortgages drawn-down over the period.
90% off the peak is an average national mortgage of 31K