Tuesday 20 February 2018

Home-owners rushing to repay mortgages – Central Bank

The Central Bank building in Temple Bar.
The Central Bank building in Temple Bar.
Colm Kelpie

Colm Kelpie

THE value of mortgages given out last month fell by almost €300m, data from the Central Bank shows.

Loans to households fell across the board in May, but the biggest drop was recorded in home loans.

Homeowners continued to prioritise paying down debt as household loan repayments exceeded drawdowns by €490m during the month.

The data backs up arguments that the property price surge experienced in Dublin has nothing to do with credit.

Economists and experts have said there is no bubble in Dublin, claiming the surge in prices is attributable to lack of supply.

Separate data from the European Central Bank (ECB) showed private-sector deposits here saw their biggest monthly decline in three-and-a-half years in May.

Private sector deposits at Irish banks fell by 2.7pc to €201bn from the previous month. This marked the largest monthly decline since November 2010.

Data collected by the Central Bank of Ireland showed private sector deposits fell by €5.5bn to €174bn, although the data differs from the ECB as the latter does not include deposits from central government and banks and are not seasonally 

The massive drop was largely attributed to the wind down of the Irish Bank Resolution Corporation (IBRC).

Deposits from households also fell over the month, but at the moderate amount of €72m.

Non-resident private-sector deposits fell by €763m during May following a €424m decrease in April.

Developments in May were mainly driven by a €657m fall-off in private sector deposits from non-euro area residents, the majority of which 
was withdrawn from IFSC banks.

Credit institutions' holdings of debt and equity securities issued by the Irish private sector decreased by €335m during May 2014, following a decrease of €179m in April

Meanwhile, ECB data showed deposits in Cyprus and other s
outhern European countries hit by the euro zone debt crisis remained 
relatively stable.

Big account holders in Cyprus's two largest lenders were forced to take a hit as part of an international bailout for Cyprus last year and 
private sector deposits at all banks on the island had been broadly declining since June 2012.

In May, private-sector deposits at Cypriot banks fell by 0.1pc to €34.303bn from the previous month.

The deposits are about 32pc below their peak of €50.5bn in May 2012.

Banks in the country were shut for nearly two weeks in March last year after Cyprus agreed a €10bn bailout under which major depositors had to pay part of the cost of the rescue.

Irish Independent

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