Mortgage lending grew rapidly in the second quarter of the year, with both the number, and value, of loans reaching the highest level since Q2 2010.
According to the latest IBF/PwC Mortgage Market profile for the second quarter of the year, the value of mortgages drawn down increased to €820 million, up by 58.4 per cent on Q2 2013 and and 44.3 per cent on Q1 2014.
The volume of loans also increased, up to 4,803, an increase of 40.2 per cent on Q1 2014, and 48.7 per cent on Q2 2013.
Lending however remains way off peak levels – as a comparison, in Q2 2006, the total value of loans was €10.1 million across 53,449 laons.
First-time buyers and those trading up accounted for the majority of mortgages, at 86.4 per cent. However, there are signs of a muted recovery in the investment mortgage market, which grew, year-on-year, for the fourth consecutive quarter, and now accounts for 3.9 per cent of loan volumes.
The average loan size for purchasing a property increased to €178,297 in the second quarter, up 5.3 per cent on the same period in 2013, dwarfing the 11 per cent or so price growth recorded during this period. The average investment property mortgage fell to €101,606, the lowest level since the series began in 2005, and down 68 per cent from the peak in Q2 2008.
In a note, Goodbody Stockbrokers said that it is now forecasting loan growth of 50 per cent in value terms, bringing the total market to € 3.75 billion for the year. However it noted that while this will be the largest amount of mortgage lending since 2010, it believse that this is just half of a “normal” level of lending.
Meanwhile, KBC Bank has announced a cut in the interest rates on its fixed rate mortgages for new business owner occupiers. The bank has cut its rates by as much as 60 basis points, or 0.6 per cent, with a one-year fixed rate falling from 4 per cent to 3.5 per cent, and a three-year fixed rate for those with a loan-to-value of between 80-90 per cent dropping from 4.9 per cent to 4.3 per cent.