The number of mortgages approved in January grew 2.8pc compared to the same month last year, indicating a resilient market despite the pandemic's impact on the economy, according to the latest data from the Banking and Payments Federation of Ireland (BPFI).
A total of 3,355 mortgages valued at €823m were approved last month – a drop of 16.1pc on December.
In value terms, mortgage approvals were up 10.7pc year-on-year in January, but down 15.9pc month-on-month due to the smaller number of loans approved.
First-time buyers continue to drive the market with slightly more than half of all approvals. Mover-purchasers were 27.2pc of the market but a 32.9pc share in value terms because of the relatively higher price of trade-up homes.
Remortgages showed strong growth of 10.6pc annually, indicating lower rates are proving attractive.
"We saw continued year-on-year growth in both approval volumes and value especially amongst first-time buyers and mover purchasers," said Brian Hayes, CEO of the BPFI. "This points to a solid pipeline for drawdown activity as we move into 2021."
The Association of Irish Mortgage Advisors (AIMA) said the strong pipeline of approvals being carried over from last year meant that the mortgage market will reach €9.25bn in loans in 2021.
AIMA said a combination of Covid saving among upper income borrowers and working from home was driving market growth.
"The upward growth in mortgage approvals has primarily been driven by the fact that a large number of potential mortgage customers were unaffected by Covid-19 restrictions in terms of income," said AIMA chairperson Trevor Grant.
"In addition, working from home and having more time on their hands, has focussed the minds of potential mortgage customers to put the wheels in motion to secure mortgage approval."