This afternoon, the Irish Banking Federation (IBF), which claims to represent banks which account for more than 95% of all mortgage lending in Ireland, has released its mortgage approval statistics for the three months ending 31st March 2012. They figures show a substantial decline from what was already a low base and confirm that the mortgage market in Ireland is moribund. In total, just €450m was approved in new lending in Q1, 2012, down 96% from peak in Q3, 2006 and down 30% from Q4,2011 and if you believe there is any seasonality to lending in the Irish market, then the value of lending is down 22% from Q1, 2011. Absolutely dreadful results, and one might ask where is Bank of Ireland’s commitment to advance €1.5bn in new mortgage lending in 2012.
With respect to volumes, just 2,213 loans were approved for true home purchase in the quarter, plus there were 447 remortgages and top-ups. This volume is down 31% from Q4,2011 and 5% from Q1, 2011 and a staggering 93% from the peak in 2006.
With respect to average values of mortgages, the picture here is more stable but as we don’t have information about loan-to-values, we are unable to make any deduction as to the price of purchases. The average first time buyer mortgage was €164,000 in the quarter, up from €160,000 in Q4,2011 but down from the peak of €252,000 in 2008. The average mover mortgage was €208,000 down from a peak of €272,000.
Commenting on the latest data, Pat Farrell, IBF Chief Executive, stated “we have consistently pointed to the need for close examination of activity over a series of quarters before calling any sign of recovery in the mortgage market. In this regard the reduction in Q1 activity reflecting traditional seasonal factors – while following as it does three successive quarters of growth – cautions against any definitive view on market direction at this juncture. However, it is interesting to note that, at 4.7%, the year-on-year reduction in activity in the all-important home purchaser segments of the market is considerably less than the 19.3% reduction in overall market activity.”