As the Irish economy continues to reopen following the shock of the Covid-19 pandemic, mortgage approvals and drawdowns have remained on the rise. Recent figures from the Banking and Payments Federation Ireland (BPFI) has shown data on mortgage drawdowns and approvals for the second quarter of 2021.
According to the data from BPFI, some 9,625 new mortgages were drawn down in the second quarter of 2021. This represents an increase of 45.4 percent in volume when compared to the same data from the second quarter of 2020, when the pandemic was at its height. These new mortgages have a total value of €2.23 billion, representing an increase in value of 52.5 percent when compared with the same period a year ago. BPFI reports that of these new mortgages, first time buyers represent the largest segment, accounting for some 50.9 percent of all new mortgages.
The vast majority of new mortgages drawn down were to finance a purchase of a home. In the second quarter, there were 7,438 mortgage drawdowns for purchases, with a combined value totaling €1.8 billion, a 47.8 percent increase compared to the same period of 2020. The biggest change between a year ago and present-day drawdown rates came in the category of residential investment letting mortgages, which rose 60 percent year on year.
Mortgage approvals saw strong growth as well. In fact, 5,204 mortgages were approved in the last month, totaling over €1.27 billion in value. This represents an increase of 129.9 percent in volume when compared to the same quarter in 2020.
Similar to the drawdowns activity, the rise in approvals was also fueled by a surge in first time buyers. According to the figures from BPFI, first time buyer approvals rose to 2,755, representing an increase of 160.2 percent year on year, outpacing mover approvals, which increased by 128.5 percent during that same time period.
A separate report from Goodbody shows good news regarding housing completions. As construction is allowed to resume given loosening restrictions, Irish housebuilding activity has bounced back strongly in an effort to meet the strong demand for housing nationwide.
Goodbody reports that housing completions in the second quarter increased 39 percent year on year, though they are still 7 percent lower compared to the rates from the second quarter of 2019.
Goodbody also noted that there was a surge in housing projects started in April and May of this year, highlighting the strength in the housing demand. As soon as construction restrictions were lifted on April 12th, builders got back to work in order to fill the pent-up demand for housing that accumulated over the course of the pandemic. Data analysis shows that 18,911 buildings were currently under construction as of June 2021, representing a 38.4 percent rise compared to a year earlier.