Mortgage lending surges in first quarter as recovery gathers pace
Mortgage lending surged in the first three months of the year as the recovery continued.
New figures from the banks show that more than 5,600 new mortgages, to the value of €983m, were drawn down by borrowers here during the first quarter of the year.
This was up 64pc compared with the same quarter in the previous year, according to the Irish Banking and Payments Federation.
The jump prompted analysts to say the housing market recovery is picking up pace.
But many of those who had a mortgage issued to them actually had approval before new Central Bank lending restrictions were imposed.
First-time buyers account for more than half of the mortgages issued, with those trading up accounting for almost four out of 10 mortgages drawn down.
The average loan size rose to € 175,016 in the first quarter, up 5.5pc on the previous quarter.
Economist with Goodbody Juliet Tennent said the figures showed the property market was recovering.
"The first quarter mortgage draw-downs confirm the strong rebound currently under way in the Irish housing market," she said in a note to investors.
She warned that the introduction by the Central Bank of lending restrictions in February made it difficult to work out the underlying trends.
"While the noise created by the announcement of new macro-prudential rules from the Central Bank makes it difficult to discern underlying trends, the first quarter out-turn is above our expectations," she added.
Ms Tennent is now forecasting that home-loan lending will jump by almost €1bn this year to around €4.9bn. This is despite the Central Bank lending rules limiting credit availability as the year progresses.
The value of switcher lending, at some €41m, also more than quadrupled compared with last year, although the overall numbers switching are low.