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Mortgage market slowdown trend evident in latest IBF data

  • Overall size of mortgage market continues to increase
  • Over 38,000 new mortgages issued in Q1 2007
  • First-time buyers account for 21% of market

The IBF/PwC Mortgage Market Profile, published today by the Irish Banking Federation (IBF), shows that the level of new mortgage lending in the first quarter of 2007 is down 7.5% in value compared to the same period in 2006. At the same time, the overall size of the residential mortgage market continues to increase and now stands at €129 billion.

This fourth in the series of the IBF/PwC Mortgage Market Profile shows that 38,236 new mortgages to the value of over €7.8 billion were issued during the first quarter of 2007 – down 7.5% in value and 19% in volume on the first quarter of 2006. The following are among the key findings to emerge from an analysis of the published data.

In value terms, the slowdown in new mortgage lending is evident across most market segments – the one notable exception is re-mortgaging (switching) which shows year-on-year growth of 5.8%.
In volume terms, the slowdown is evident across all market segments – with the least decline among first-time buyers (down 9.9%) and the largest decline among mover purchasers (down 25%).
First-time buyers now account for 20.7% of the total market by volume – their highest share yet since commencement of this series. Notwithstanding the anticipated slowdown in new mortgage lending, Central Bank data confirms that, at €129 billion, the overall size of the mortgage market continues to increase.
Commenting on the data, IBF Chief Executive, Pat Farrell, stated:“The IBF/PwC Mortgage Market Profile for Q1 2007 is consistent with all other housing and mortgage market indicators in showing a slowdown in activity. However, key factors underline market confidence for sustainable growth going forward: among these are continued economic and employment growth, favourable demographic trends and robust competition among mortgage providers.

“A series of interest rate increases and nine months of sustained market uncertainty around signalled changes in the stamp duty regime have contributed to the market slowdown. While the former is outside our direct control, the latter is not and should be resolved without further delay.”

Note to Journalists: Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 60 member institutions, including licensed domestic and foreign banks and institutions operating in the financial marketplace here. Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644

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