DUBLIN: There was 25% annual growth for mortgage approvals in July according to new data released today. The average mortgage approval to first-time buyers was €211,000 in August, up 11% on the year. New data from the Banking Payments Federation Ireland (BPFI) show €842m of mortgage approvals in August. This is up 25% on last year. This means that over the past 12 months Irish banks have approved €8.8bn of new mortgage loans. However, there was €6.4bn of mortgage drawdowns in the 12 months to the second quarter 2017, compared with €8.4bn of approvals.
Taking the first eight months of 2017 as a whole, mortgage approvals were €6.2bn, up 42% from the €4.3bn in the same period of 2016. Commenting on the figures today, Davy Stockbrokers said, “The latest CSO data show that Irish house price inflation is now running at 12%. The mortgage market data show that growing leverage on mortgage loans is contributing to ‘double-digit’ house price growth. In August, the average approval to first-time buyers was €211,000, up 12.4% on the year. BPFI data also show that the incomes of the median first-time buyer grew by 2.6% in the twelve months to Q2 2017. So loan-to-income ratios are rising above 3x but still remain well below the Central Bank’s regulatory threshold of 3.5x. We expect that leverage will continue to rise over the next 18-24 months, driving Irish house prices higher.”
