The number of mortgages granted in 2012 could fall to an all-time low as lenders continue to restrict lending.
Based on the first quarter figures published by the Irish Banking Federation, a total of just 2,630 mortgages were granted during that period. However, when re-mortgage and top-up loans were stripped out (these loan are not used for a property purchase), just 2,213 mortgages were granted to first time buyers, existing mortgage holders and those looking to purchase an investment property.
First quarter statistics can provide important early indications as to the overall level of mortgage lending activity for a given year. This was certainly the case for 2011, where lending activity in the first quarter turned out to be a very proxy for the full year and where lending fell to a 40-year low.
2012 is off to really bad start. If the first quarter figures hold up for the full year, 2012 could see fewer loans being granted than at any point since records began in 1970.
In 1970 a total of 8,929 loans were granted.
In 2012, as few as 8,852 loans could be granted.
What is even more interesting is the number of mortgages relative to population and here, we have a total wipe-out.
In 1970, there were just over 2.9million people living in the country.
Today, the population is just over 4.5Million
There has been a population growth of over 55% since the early 1970’s. However, it is extraordinary to think that a society that had been coaxed into becoming a ‘credit society’ through a combination of easy access and low-cost credit now has less access to credit than at any point since records began.
Without a functioning credit market, especially a functioning mortgage market, it is difficult to see a meaningful return of buyers to the property market.
|Year||Mortgage Units||Data Source|
|2012||8852*||IBF (estimated based on 2,213 units in Q1)|