January Mortgage Approvals Continue to Follow Growth Trend, says IBF

Year-on-year growth of 10.8%
The latest figures from the IBF Mortgage Approvals Report, published by the Irish Banking Federation (IBF), show that 1,587 mortgages to the value of €276 million were approved in the three months ending January 2014.
The following are the key elements:

  • A total of 1,587 mortgages were approved in January, of which 1,477 (93%) were for house purchase.
  • The number of mortgages approved showed a year-on-year increase of 10.8% and a month-on-month fall of 9.9%.
  • The value of mortgages approved in January was €276 million of which €266 million (96%) was for house purchase.
  • The value of mortgage approvals increased by 16.2% year-on-year and fell 12.8% month-on-month.

This graph presents the cumulative year to date trend in mortgage approvals up to January each year

January yoy

The following graph presents the trend in approvals on a monthly basis since January 2012

IBF Approvals Report Jan 2014 monthly

Commenting on the figures, IBF Chief Executive, Noel Brett stated:

“Encouragingly, the year-on-year picture shows growth of over 10% in the number of mortgages approved when compared with the same period last year, and even more notably, an increase of over 33% on 2012. This trend clearly demonstrates the momentum which has been evident over the last two years and is a firm indication of underlying growth in the market And while the latest figures do show a decline on a monthly basis, this is to be expected taking seasonal factors into account and the fact that January is traditionally the weakest month of the year for mortgage activity. Together with other stakeholders we are concerned that housing supply constraints in key locations do not become a serious impediment to sustained growth and we are heartened by recent reports that the authorities will be taking steps to address this matter.”

Data collection for the IBF Mortgage Approvals Report began in August 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The report can be viewed on the IBF website here.

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Note: The Irish Banking Federation (IBF) is the principal voice of the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Jillian Heffernan Marketing Communications Manager, IBF, Ph: 01 4748835 / 087 9016880

 

SME Conference: Supporting Recovery and Growth – 27th February 2014

Pictured L to R: Declan McDonald, PwC, Joanna Drake, EU Commission and Maurice Crowley, IBF

The Irish Banking Federation hosted its SME Conference – Supporting Recovery & Growth on Thursday 27th February 2013 at The Marker Hotel, Dublin 2. Against the backdrop of the current challenging climate in which SMEs are operating, the conference examined the future for SMEs; addressing the many variables influencing the sector’s return to growth including the issues of the economic environment, financing and re-structuring. The programme also explored the wider European perspective and assessed the business bank relationship and how this can be enhanced. The conference closed with a panel discussion involving the heads of business banking from three of the country’s main anks.

IBF Housing Market Monitor shows increased activity in housing market nationally but growing concerns for supply issues in Dublin

  • Encouraging trends in transactions and mortgage market emerge during 2013
  • Concern for supply shortage in Dublin as prices in capital continue to rise

The IBF Housing Market Monitor Q4 2013, published today by the Irish Banking Federation (IBF), shows that, while positive trends emerged across some of the key housing market indicators in 2013, significant national variations in market conditions persist. With 2013 as a whole showing increases in the number of properties listed for sale, as well as in the number of property transactions, the rise in house prices in Dublin coupled with a growing shortage of accommodation remains a cause for concern.

Drawing on various published data on the residential housing market to provide a composite analysis on where the market may be going, the Q4 2013 IBF Housing Market Monitor shows the following picture in 2013 as a whole, compared to 2012:

* 7% increase in the number of properties listed for sale

* 10% increase in the number of housing market transactions

*6.1% increase in the level of mortgage approvals with a decline of 5% in the level of drawdowns.

In his commentary accompanying the IBF Housing Market Monitor, Ronan Lyons, Assistant Professor of Economics, TCD, writes that the trends seen in the volume of transactions registered throughout 2013 is an encouraging sign, particularly as this increase was seen both in Dublin and throughout the country. He also points to the ‘hangover’ experienced from the end of Mortgage Interest Relief in 2012, commenting that it seems to have impacted the mortgage market, rather than the housing market.

However, despite the positive signs indicated by increasing transactions and property listings, Lyons goes on to highlight the cause for concern in relation to the two tier market which he believes is now firmly established and the driving factors behind this – including a growing shortage of housing supply in Dublin combined with a sharp increase in prices in the capital.

“While trends in both transactions and the mortgage market are encouraging, the supply side of the market continues to remain a concern….. Perhaps the most startling thing to emerge from the report is just how few new homes are being built. Fewer than 1,400 homes were completed in Dublin during 2013, when prices rose at double-digit rates, compared to more than 2,200 during 2010, when prices were falling at double-digit rates. While this marks a small increase on the figure for 2012, it is surely of huge concern to policymakers, as is the lack of commencements of new homes. Fewer than 1,500 new homes were started in Dublin in 2013, although that is double the number started in 2012. This compares to roughly 10,000 new households being formed a year in the capital. Taking into account up to 5,000 family homes that come on the market each year due to down-trading and executor sales still leaves a significant shortage of accommodation in Dublin that is growing year on year”.

“The government appears to be aware that, if there is anything policy should be aiming for in relation to house prices, it is that these should be stable, at least adjusting for inflation. While overhang from the bubble still persists in many parts of the country, Dublin has had a lack of housing for over a year and yet there is still almost no response in construction. The obstacles to the resumption of meaningful levels of activity in construction in the capital must be understood and soon, if Dublin is to remain competitive and affordable for those on average incomes”.

ends

The IBF Housing Market Monitor is published quarterly and can be viewed on the IBF website here.

Note: The Irish Banking Federation (IBF) is the principal voice of the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Jillian Heffernan, IBF Marketing Communications Manager,

Ph: 01 474 8835 / 087 9016880

New Mortgage Lending Continues to Grow in Q4 2013

  • 5,206 mortgages issued in Q4 2013 to the value of €896 million
  • Home purchasers account for almost 90% of all new mortgages
  • €2.5 billion in new mortgage lending drawn down during 2013

The IBF/PwC Mortgage Market Profile published today shows that 5,206 new mortgages to the value of €896 million were issued by lenders here during the fourth quarter of 2013. This brings to 14,985 the total number of mortgages issued in 2013 to the value of €2.5 billion.

These latest figures show an increase of over 16% in volume when compared to Q3 2013.  As the following graph shows, this latest quarterly increase represents the third consecutive quarter of growth – albeit coming from a relatively low base. As anticipated, the figures show a year-on-year decline of 13.9%, reflecting the significant front loading of activity in Q4 2012 ahead of the expiration of mortgage interest relief at the end of 2012.

MMP Feb 2014 1

The key home purchaser segments of the market, First Time Buyers and Mover Purchasers, continue to dominate the market accounting for almost 90% (87.8%) of new mortgages issued.  In effect, over 90% (93%) of all mortgage credit now goes to the home purchasing segments of the market.

As the following graph indicates, the pipeline of approved mortgages is relatively strong, providing evidence of underlying growth in the market.

MMP Feb 2014 2

Commenting on the latest data, Noel Brett, IBF Chief Executive, stated:

“With three consecutive quarters of growth in new lending during 2013 – albeit from a low base – the emerging trend over the course of the year is a welcome one providing further evidence of a more active mortgage market. While the figures do show a year-on-year decline, this comes as no surprise, resulting as it does from the surge in activity in Q4 2012 ahead of the expiration of mortgage interest relief. With up to €2.5 billion worth of new mortgage lending issued in 2013, we will continue to closely monitor mortgage approvals and drawdown activity over the coming months for further signs of sustained growth. And we will be engaging with policy makers and other stakeholders to help ensure that housing supply constraints in key locations do not become a serious impediment to sustained growth.”

The IBF/PwC Mortgage Market Profile can be viewed on the IBF website here.

ENDS/

Notes

The Irish Banking Federation (IBF) is the principal voice of the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Jillian Heffernan, Marketing Communications Manager, IBF, ph: 01 474 8835 / 087 9016880