Year-on-year Increase in New Mortgages for Home Purchase – the first since 2006

August 20, 2012

• Home purchasers account for 4 out of 5 new mortgages
• Evidence of stabilisation in mortgage market activity

The IBF/PwC Mortgage Market Profile, published today, shows that the number of new mortgage loans issued to First-Time Buyers and Mover Purchasers during Q2 2012 increased on a year-on-year basis – the first time both of these home purchasing segments have increased year-on-year since Q1 2006. 

A total of 3,225 new mortgages to the value of €524 million were issued during the second quarter of 2012.  This represents a 22.6% increase on the number issued during the first quarter of 2012.  More significantly, while the year-on-year trend shows a 9.2% decrease in the total number of mortgages issued, both the First-Time Buyer and Mover Purchaser segments recorded increased activity year-on-year for the first time since 2006.  This continues the pattern of recent years of weak mortgage activity overall, but it is notable that the rate of contraction in such activity continues to slow year-on-year, as is evident from the following graph:

The key home purchaser segments of the market - first-time buyers and mover-purchasers - continue to dominate what is now a smaller market in terms of overall activity.  Together they account for more than four-fifths of all new mortgages issued.  In effect, 88% of all mortgage credit now goes to the home purchasing segments of the market.

Commenting on the latest data, Pat Farrell, IBF Chief Executive, stated:

“These latest figures show that contraction in activity continues to slow significantly and the second quarter of this year has actually recorded modest growth in both first-time buyer and mover-purchaser activity – something not seen since the first quarter of 2006.  Taken together with recent comments from property economists signalling stabilisation in house prices in key sectors of the Dublin market, we will be looking to the next quarter’s data for confirmation of the trend indicated in this quarter.  The period to the year end is key as mortgages taken out after 31st December next will not qualify for mortgage interest relief.

The IBF/PwC Mortgage Market Profile can be viewed on the web IBF-PwC Mortgage Market Profile Q2 2012 

IBF/PwC Mortgage Market Profile - Data Series

The full IBF/PwC Mortgage Market Profile data series, from Q1 2005, is available online. To access the data click IBF-PwC Mortgage Market Profile Times Series Q2 2012 

To save the data series to your computer, right-click on the link, select Save Target As.. or Save Link As...and save the file to the preferred location on your computer.

Note: The Irish Banking Federation (IBF) is the principal voice of the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Felix O’Regan, Director Public Affairs, IBF, tel. 671531, 087 6481644