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Slowdown in mortgage market activity reflects overall economic environment, says IBF

  • Total of 110,300 mortgages issued in 2008
  • First-time buyers grow share of slowing market to 21%
  • Improving affordability from lower rates and house prices

The IBF/PwC Mortgage Market Profile published today shows that 18,706 new mortgages to the value of some €3.5 billion were issued during the fourth quarter of 2008. This brings to 110,305 the total number of new mortgages issued in 2008 at a value of over €23 billion; and the overall mortgage book now stands at €148 billion. The volume of new lending in Q4 is down 33% compared to the previous quarter and is down some 50% year on year – a trend which is consistent with other key market indicators and which reflects the general economic environment. The following are among the key features of the Q4 data:

First-time buyers (FTBs) increased their share of the overall market – albeit a smaller market. Their share by volume now stands at a record 21.2%, reflecting the relative resilience of the FTB segment.

The average loan size fell across all markets segment, continuing the trend evident over recent quarters and reflecting falling house prices.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated:“The recorded slowdown in mortgage market activity reflects the overall economic environment and the very challenging situation that prevails. However, we continue to see very clear evidence of improved affordability through falling interest rates and house prices and this should help to further build confidence among first-time buyers. On the supply side, lenders are variously announcing increased capacity for mortgage lending and introducing innovative and competitively-priced product offerings. Together, these factors can provide the basis to stimulate activity in the market.”
The IBF/PwC Mortgage Market Profile can be viewed here.

Note: Irish Banking Federation (IBF) is the leading representative body for 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: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644

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