Value of mortgages falls €533m due to decline in demand
THE value of residential mortgages fell by €533m in the last three months of last year compared with the previous quarter, new figures show.
The continuing decline in demand for mortgages was in line with an overall fall in lending in the economy in the last three months of 2009, according to Central Bank figures.
Total mortgages outstanding decreased by €315m in the quarter, but the fall in residential mortgage loans was €533m. Some €113bn is outstanding on residential properties, excluding buy-to-lets and holiday or second homes.
The figures appear to show a rise of €218m in mortgages for buy-to-let properties and holiday homes during the quarter. But economist Alan McQuaid of Bloxham said this was due to lenders changing the way they classify mortgage drawdowns.
Overall residential mortgage lending declined by 0.3pc in the year ending last December.
The figures show that the amount of money owed on personal credit cards remained constant at €2.9bn.
In contrast to other months, some €929m was spent on credit cards compared with €876m repaid. This was due to Christmas spending and is unlikely to indicate a reversal of the trend of consumers paying down debt, according to Austin Hughes of KBC Bank.
Lending to non-property, non-financial business sectors declined by almost €2.1bn, or 4.2pc during the quarter with credit outstanding to these industries falling by 11.3pc in 2009 as a whole.
The Central Bank's report shows lending to property-related businesses fell almost €3.3bn in the last quarter.
Credit to the construction and real estate sectors fell by a combined 9.4pc in 2009 with writedowns and rising bad-debt provisions a significant factor, the Central Bank said.