Mortgage approvals increase slightly
The number of mortgage approvals for all types of house loans rose by less than 2% in November from a year earlier, banking industry figures show, as lending growth continues to be pegged back by limited new housing supply and affordability.
Mortgage approvals rose to 4,182 in November from 4,102 in November 2018, although the value of the loans rose 7.2% over the same period to €960m, according to the Banking and Payments Federation Ireland.
Continuing a long-running trend, around half of all the new borrowers in the month were first-time buyers.
“Looking at the recent underlying trends, approvals grew both in volume and value terms year-on-year with the first-time buyer segment showing consistent growth and this continues to be a key driver of the market,” said the business group’s chief executive Brian Hayes.
Mortgage broker Michael Dowling said that 2020 was likely to be the same as in 2019, with “steady but not spectacular mortgage lending growth” as the Central Bank rules and housing supply curtails the growth in the volume of mortgage borrowing.
“Mortgage lending is growing in line with the number of new homes but not in line with the overall strong growth in the economy,” he said.
New mortgage lending is highly significant in determining the profitability of Irish banks and their share prices. In the first trading day of the new year, the two main Irish bank shares tapped a wave of investor buying in Europe for battered banking shares, buoyed by hopes for faster-than-expected economic growth this year.
Shares in AIB climbed 3.5% and pared the stock’s losses to 8% from a year earlier. Bank of Ireland shares ended 2.7% higher.
However, Permanent TSB fell 2%, to bring its losses from a year ago to 32%.
