The value of mortgages approved and drawn down during the third quarter surpassed the pre-cash peak recorded in 2008, Banking & Payments Federation Ireland (BPFI) has said.
The average mortgage for first-time buyers in Q3 of €284,623 surpassed by more than €16,000 the previous record of €268,220 set in the first quarter of 2008 on the verge of the housing market collapse.
A total of €14,851 new mortgages valued at more than €4bn were drawn down by borrowers between July and September, representing an increase in volume 29.4% and 44.5% in value year-on-year.
The value of the average FTB mortgage drawdown in Q3 was €270,568, compared to €243,271 a year earlier, while the average mover-purchase drawdown rose from €284,836 to €315,463.
FTBs remain the largest buying segment by volume (44.3%)and value (43.9%), and non-purchase mortgage activity such as switching and top-ups grew 115.8% in volume year-on-year to 5,081 and by 175% in value annually to €1.3bn.
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“One of the most notable points from this quarter’s drawdowns figures is the new record high which has been set for the average homebuyer mortgage which has now hit €284,623 and is over €28,000 more than it was in Q3 2021 (€256,547)," said Brian Hayes, CEO of the BPFI.
"This comes on the back of strong house prices inflation and the continuing challenge of supply in the housing market.
“Interestingly when we look at the types of properties being purchased we can see that FTBs have come to dominate the market for new/self-builds accounting for 78.2% of the value of home mortgages on new properties in Q3 2022.”
BPFI said the September approvals figures show the pipeline for home purchase mortgage has weakened this year, with 5,350 mortgages approved, including 2,460 by FTBs (46%), and 1,063 by mover-purchasers (19.9%).
"Looking at the pipeline of mortgage activity through our latest approvals figures, approvals continued to grow in September 2022 with this growth driven by the high level of switching which is currently underway and likely a response to recent ECB decisions to increase interest rates," said Hayes.
The value of mortgages approved in September were valued at close to €1.5bn, of which FTBs made up €665m (45.2%) and mover-purchasers €345m (23.4%).
Switching and top-ups grew by 98.7% in volume terms year-on-year to 1,717 and by 140.2% year-on-year to €443m over the same period.
The value of mortgages approved in September fell by 3% month-on-month and rose by 22.1% year-on-year.
"During the month of September non-purchase mortgages, primarily made of up those switching, accounted for 32% of all approvals, up from 18% during the same period last year," Hayes added.
"By contrast FTB and mover purchase approval volumes fell year on year in September 2022 and the annualised volume of purchase mortgages fell for the fifth time in the past six months, dropping by 0.65% in the twelve months ending September 2022, pointing to a weaker pipeline than earlier this year, albeit form historically high levels.”
The Central Bank this month relaxed mortgage lending restrictions to allow first-time buyers to borrow four times their gross annual income and reduce the deposit required by mover-purchasers to 10% of the value of their property.
(Pic: Getty Images)
