Lending limits dampen home loans market
New lending restrictions have been blamed for fewer people getting approved for a mortgage.
Rules introduced by the Central Bank last month make it more difficult to get approved by a bank for a mortgage.
The numbers being cleared to take out a mortgage continue to rise, but at a slower pace, new figures show.
Just 1,587 mortgage approvals were granted in January, according to the Banking and Payments Federation Ireland.
That is down from 2,780 in December. However, the banking lobby group said mortgage activity typically drops in January.
It also said that the numbers approved to take out a home loan in January were up 57pc, compared with the same month last year.
Not everyone approved for a mortgage will end up drawing it down, as they may be outbid for a property they are trying to buy.
The value of mortgages approved in the month was €470m, of which €441m was for house purchases.
Goodbody Stockbrokers economist Dermot O'Leary said the figures showed a "clear behavioural shift" by consumers in the run-up to the introduction of the new lending limits.
"There was a slowdown in the rate of growth in the number of mortgages approved in January," he said.
There was a large rise in the numbers being approved for switcher mortgages, although this is off a low base.
Davy Stockbrokers analyst Diarmaid Sheridan said the figures showed an element of accelerated approvals in December, as house purchasers locked in approval prior to the new Central Bank's restrictions.
"With approvals typically lasting six months, it is unlikely that the impact of these restrictions will be seen until the second half of this year," he said.
Mr O'Leary said he expected that, because many people still had mortgage approval that they received before the new lending limits came in, the market will hold up for the first half of the year. "We have previously stated that 2015 will be a year of two halves for the Irish mortgage market," he wrote in a briefing note.
"We remain of that view, with draw downs in the first half of this year being propelled by the momentum in approvals over recent months, the second half may be a different story."
But his firm is forecasting 29pc growth in new lending in 2015 to €5bn.
Central Bank limits mean most first-time buyers have to come up with a 20pc deposit, and can only borrow three-and-a-half times their gross income.