Rise in mortgage lending - but fears it won't last
There was a rise in the number of mortgages issued by banks in recent months, in a move that surprised analysts.
However, there are fears that mortgage lending is set to fall back heavily in the final three months of this year.
Close to 7,300 mortgages were issued between July and September, up 15pc on the same period last year.
The value of the mortgages drawn down was €1.33bn in the third quarter, the Banking and Payments Federation said.
The average loan size rose to €182,400, up 2.2pc on the previous quarter.
And there was a rise in the numbers approved for a mortgage in September. An average of 2,683 mortgages a month were approved this year. The value of mortgages approved every month averages €499m, with 92pc for house purchase.
However, economist with Davy Stockbrokers, Conall Mac Coille, said mortgage lending is set to drop due to Central Bank lending limits. "Lending growth looks set to slow sharply in the final quarter of 2015," Mr Mac Coille said.
He said this was based on reports that banks have now used up their 15pc allocation of loans allowed to exceed the Central Bank's loan-to-value (LTV) limits on lending.
He added that a recent survey indicated that banks expected to tighten credit availability in the final quarter of this year.
Meanwhile, bad loans in Irish banks are falling but remain among the highest in the eurozone, the European Commission has said. And long-term mortgage arrears continue to rise, it added.
In a statement marking the end of the fourth post-bailout review, released yesterday, the Commission also sounded a veiled note of caution over the source of the finance behind the €1.5bn of extra spending announced in the Budget. It said the spending boost was being financed by higher-than-expected revenue, but noted that this was mainly from "volatile" corporation tax receipts.