Mortgage lending plunged 71pc in second quarter
Mortgage lending dropped 71pc in the second quarter as falling house prices, stricter lending rules and rising unemployment deterred buyers.
The value of lending fell to €2.17bn in the three months through June from €7.57bn a year earlier, the Irish Banking Federation (IBF) said in a report today. The volume of home loans dropped 64pc.
Ireland’s economic slump has pushed unemployment to a 14-year high, undermining consumer confidence.
House prices have fallen more than 22pc from their January 2007 peak, while banks have applied tougher conditions on loans as risks increase and access to funding remains difficult.
“The overall level of mortgage activity continues to reflect the very challenging economic environment,” IBF Chief Executive Officer Pat Farrell said in the report.
“The investment end of the market continues to show the greatest decline.”
The volume of mortgages to first-time homebuyers fell 48pc in the second quarter from a year earlier and the volume to investors dropped 79pc, the report said.
First-time buyers accounted for 25pc of all new mortgages issued in the quarter.
By volume, overall mortgage lending rose 15.4pc in the second quarter compared with the first three months of the year, which the federation said is the seasonal pattern.
(Bloomberg)
- Colm Heatley
