Numbers released for Irish Mortgages

Banking and Payments Federation Ireland have released the figures from August concerning the number of approved mortgages. Of course, Covid-19 has been a very difficult time for many people, and as such, there has been a decrease of people asking for mortgages.

The statistics show that there have been 14.1% more mortgage approvals in August compared to July. This translates to 3,875 approved mortgages in August, which is 11% less than last year, although this was to be expected because of the global pandemic.

The total value of approved mortgages in August was 946 million euros which seems to suggest that the market is recovering well. It is likely that this figure reaches 1 billion euros in September, which would be a good sign for the general Irish economy, which seems to be doing fine.

Movers, as in people who had previously owned a home thanks to a mortgage, accounted for 1,000 of the approved August mortgages while first time buyers were responsible for 2,259 of these mortgages. This means that first time buyers represented 58% of the total mortgages whilst movers represented 26%, which are normal figures.

If we translate this to a value, first time buyers had approved mortgages for a value of 556 million euros while movers’ mortgages were valued at 267 million euros. In percentages, this means that first time buyers represented 59% of the value of the mortgages, and movers represented 28% of the same value.

Dr Ali Ugur, who is Banking and Payments Federation Ireland’s chief economist, is pleased with these figures, despite the fact they are down overall since last year. Mortgage activity had already increased in July, so a continued increase in August is a very good sign and should deliver a much better frame for the expected decrease in mortgage activity over the coming months. 

The mortgage drawdowns are down about 18% in the first half of 2020 compared to the first half of 2019. As previously mentioned, this is totally unsurprising: the middle of a global pandemic is not exactly the ideal time to buy a new house and make a long term commitment.

Dr Ali Ugur went on to say: “But, if recent approvals convert into drawdowns as they normally do, we could expect to see a better outcome than originally estimated back in April/May.”

He continued with: “It’s also interesting to note that when we compare first-time buyer mortgage approvals in August 2020 to the same period last year, there was a higher number both in terms of value and volume. Given that 58% of all approvals are to FTBs, we could expect to see that important category continue to be the single largest element of the market”.

All in all, it seems that the Irish mortgage market is recovering nicely, and we can certainly hope that it recovers fully after the Coronavirus panic.