This afternoon, the Irish Banking Federation (IBF), which claims to represent banks which account for more than 95% of all mortgage lending in (the Republic of) Ireland, has released its mortgage approval statistics for the three months ending 30th June 2012. The euro figures show a slightly stronger than usual increase over the traditionally quiet Q1 with lending overall up by 16% over the dismal first quarter of 2012, though lending is down by 16%.(coincidentally!) from Q2, 2012. During Q2, 2012 a total of €524m was approved compared with €450m in Q1,2012 and €624m in Q2, 2011. Lending is down an astounding 95% from the peak of €55.6bn in Q4,2005. So, modestly good results but given the very low base, for practical purposes there is still a mortgage lending drought. When you consider than Bank of Ireland ALONE was supposed to make €1.5bn available for mortgage lending in 2012, and with a market total of €1.1bn in the first two quarters, you can readily see that all is not as planned. Here is thevalue table of mortgage approvals in €m.
In terms of euro values, it is noteworthy that Buy to Let mortgages continue to wither whilst first time buyers and movers are up. Here is the volume (number of mortgages approved) table.
The number of mortgages approved is healthier than the euro values, with 3,225 approved in Q2, 2012 up 23% from Q1, 2012 and down just 9% from a year ago in Q2, 2011. First time buyers account for most of the increase in volume. And lastly, here is the average value table.
There has been a steep decline of 8% in Q2, 2012 in the average first time buyer mortgage which now stands at €151,000 down from €164,000 in Q1, 2012 and a peak of €252,000. Remember you can’t directly translate that into house prices because mortgages don’t take account of deposit levels, and in 2012 the loan to value is lower than it was at the peak.
Commenting on the latest data, Pat Farrell, IBF Chief Executive, stated “These latest figures show that contraction in activity continues to slow significantly and the second quarter of this year has actually recorded modest growth in both first-time buyer and mover-purchaser activity – something not seen since the first quarter of 2006. Taken together with recent comments from property economists signalling stabilisation in house prices in key sectors of the Dublin market, we will be looking to the next quarter’s data for confirmation of the trend indicated in this quarter. The period to the year end is key as mortgages taken out after 31st December next will not qualify for mortgage interest relief.” Pat is trying to paint the best possible picture from the table, but is unfortunately talking bollocks, as in Q2, 2011 there was also an increase in both first time buyer and mover activity, and indeed there is a seasonality to Irish mortgage lending with Q1 traditionally being quietest. And in respect to stabilisation in “key sectors of Dublin”, it is more estate agents rather than economists making pronouncements. Key difference, that.
You can see the mortgage lending analysis for Q1, 2012 here.
Minor question: In the 3rd table, average value, there is a spike for RIL in Q1 2012, any idea as to why?
@KennyK, with sub-150 BTL mortgages per quarter, the average value of RIL mortgages can vary considerably from one quarter to another.
@ NWL Surely this is more a case of lies, damn lies and statistics?
I accept that the Q2 figures are up on Q1, however they are down 9.2% in number and 16% in value on Q2 2011.
This is I suppose better the Q1, which was down 19.3% in volume terms on Q1 2011 and 22% in total value
@Niall, I think I expressed my views accurately in response to the IBF CEO comment at the bottom of the blogpost. The figures are dismal though slightly less dismal than Q1.
“Pat is trying to paint the best possible picture from the table, but is unfortunately talking bollocks”.
Pat has a long history talks bollocks mostly when he opens his mouth. As he is former general secretary of Fianna Fail expectations should be low to subterranean.
Why our media, especially RTE, treat him with kid gloves is beyond me.
At the very least his long history of BS should be continually thrown at him.
But bankers are good advertisers and biting the hand……
@NWL
Why am I helping to pay Pat Farrell’s salary? Rather large salary, I assume.
Pat Farrell is the Irish Banks’ equivalent to “Comical Ali” the Iraqi Information Minister Mohammed Saeed al-Sahaf who become a cult figure thanks to his wild claims. With a grinning face and wild gesticulations, he was the man charged with giving the Iraqi side of the story. Pat has the same level of credibility.
Here are a selection of some quotes (In a few years, we will be listing Pat’s):
“I can assure you that those villains will recognize, will discover in appropriate time in the future how stupid they are and how they are pretending things which have never taken place.”
On footage shown by several media outlets showing American troops defeating Republican Guard units on the outskirts of Baghdad: “These images are not the suburbs of Baghdad,” he said. “From what I glimpsed, these gardens with rows of palm trees on the side, which you saw in the images, are located in the south of Abu Ghreib, where we have surrounded the Americans and British.”
After the Americans seized Saddam Airport and TV cameras were allowed in, al-Sahhaf continued to deny the reports: “We butchered the force present at the airport,” he said.
‘We are destroying them’
Al-Sahhaf perhaps saved his best performance for the moment American tanks rolled into Baghdad.
“There is no presence of American infidels in the city of Baghdad,” he declared to journalists on the roof of the Palestine Hotel as gunfire echoed across the city and tanks fired from the banks of the Tigris just a few hundred yards away.
As the audience of bemused reporters pointed out the fierce firefight across the river, he continued: “There is no presence of the American columns in the city of Baghdad at all. We besieged them and we killed most of them.”
“Today, the tide has turned,” he continued confidently. “We are destroying them.”
Way to go, Pat, You’re a contender.
Comical Pat, our own version of Iraq’s Comical Ali got his answer from the Central Bank today. Even he will find it hard to justify the banks’ position. Anyway even the dogs in the street know the truth.