Mortgage draw-down rates have surged by 65pc this year
Published 14/05/2014 | 02:30
THERE has been a surge in the number of people who have drawn down a mortgage in the first three months of the year.
A total of 3,425 new home-loans were issued to property buyers in the first quarter, figures from the Irish Banking Federation show. This was up 65pc on the number of mortgages drawn down in the same three months last year, the bankers said.
The value of the new mortgages amounted to €568m.
First-time buyers and those moving homes dominate the market, accounting for 86pc of mortgages drawn down.
Irish Banking Federation boss Noel Brett said the level of mortgage draw-downs was now at its highest level in almost four years.
But he warned that far fewer mortgages were being drawn down than the number of mortgage approvals.
"We remain concerned that housing supply constraints in key locations are becoming a serious impediment to sustained growth, and this is reflected in the widening gap we see developing between the level of mortgage approvals and actual drawdowns."
In the first three months of the year almost 1,000 fewer mortgages were issued than the number of mortgages approved. Housing experts said this indicates that people who have been approved for a mortgage were viewing houses but ending up being outbid and so do not get to draw down the loan.
Meanwhile, consumer confidence rose again last month to hit a seven-year high.
The increase is despite household finances being under continued pressure, especially with the advent of water charges.
KBC Bank and the Economic and Social Research Institute said the index of consumer sentiment jumped to 87.3 in April, from 83.1 in the previous month. This is the highest level since January 2007.
But economist with KBC Bank Austin Hughes warned that people should not get carried away by the rise.
Mr Hughes said confidence in the future was "weakened by uncertainty about the precise nature and scale of household water charges".
Consumers have had very painful experiences of the past six or seven years. "For this reason, we don't think the fact that the index has reached its best levels since early 2007 should be read as suggesting that Irish consumers are extremely comfortable or exceptionally confident at present. Instead, the encouraging news is that consumers feel things are moving in a broadly positive direction."