First-time buyers borrowing an average of €162,000

First-time buyers borrowing an average of €162,000

First time buyers are drawing down mortgages averaging €162,000

First-time buyers are now borrowing an average of €162,000 as mortgage lending hits its highest level in four years.

Banks here issued just over 4,800 new mortgages in the second quarter of the year – up almost 50% on the same three month period of last year.

First-time buyers accounted for around half of the new mortgages, according to figures released by the Irish Banking Federation. Movers accounted for most of the remainder.

The average loan size was €170,000, with first-time buyers borrowing an average of €162,000.

The value of mortgages drawn down in April to June was €820m, up almost 60% on the same quarter last year. The number of mortgages drawn down, however,  continues to be far less than the number of home-loans approved by banks.

Banking analyst with Goodbody Stockbrokers Eamonn Hughes said the market was on target to record €3.75bn in mortgage lending this year.

This is up 50pc on the €2.5bn of estimated mortgage lending last year.

Mr Hughes said that the market was recovering, but was still some way off “normal”.

“The continuation of the strong momentum into the second quarter is indicative that the recovery in the mortgage market is taking hold, albeit from a low base.”

He said he expected home-loan lending to rise by a third this year.

“While this will be the largest amount of mortgage lending since 2010, we believe this is just half of a ‘normal’ level of lending,” Mr Hughes said.

The banking analyst said the numbers of people approved for a mortgage continues to race ahead of the number of mortgages actually drawn down.

This points to a chronic lack of supply of family-type homes, especially in Dublin. Buyers were being priced out of the market.

However, there is no evidence that banks have loosened lending conditions. Surveys from the Central Bank show that banks lending standards have not changed, even though demand for mortgages has risen.

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