According to figures from the Department of the Environment, Heritage and Local Government, mortgage approvals were down 21.9 per cent in Q1 compared to the same time last year.
Overall mortgage lending also dipped, with a decrease of 16.4 per cent in the same period, which the government blamed on a drop in the average loan amount.
Batt O’Keeffe, Minister for Housing, Urban Renewal and Developing Areas, commented: “Figures confirm that the housing market is evolving to a more balanced and sustainable growth pattern, particularly with regard to house prices and mortgage lending. It is underpinned by economic and demographic factors and government measures to assist affordability, especially the increase in mortgage interest relief.”
Despite the hit taken by the mortgage sector, house prices in Eire continued to increase, with both new and existing property prices jumping 9 per cent in the first three months of the 2007.
However, Michael Crowley, senior economist at Bank of Ireland, said: “The previous two quarters have shown that loan approvals have been on their way down, which reflects the cyclical downturn of the market. The European Central Bank has increased rates significantly since last year and mortgage rates have risen accordingly, stretching affordability. However, the fundamentals are still strong, with good employment levels and rising incomes.”
