Irish mortgage lending falling off a cliff....


#381

Or shares in an Irish bank. :slight_smile:


#382

re where are the cash buyers questions…

don’t forget these figures include a topups and remortgages which may not necessarily fund house purchases but proceeds from a remortgage or topup could fund a cash purchase of another property…

for the laff excluding these by my calcs from the ibf.ie/Libraries/Research_St … .sflb.ashx drawdowns directly used to fund FTB/Mover/RIL figures (in brackets are totals)

Q1 '14 3126 (3,425)
Q1 '13 1803 (2,068)

thats a bigger than 73% increase in direct purchases

even cynical 'ol me thinks that justifies the much overused ‘Surge’


#383

Its a big increase in percentage terms but maybe we have gone from 20% of normal to 30% of normal which would be a 50% increase, or from 30% to 45% which also would also be a 50%.

Neither I would call a surge.


#384

I referred on another thread to comments made by Angela Keenan last week on The Last Word…she said her info was showing cash purchases were down from 60pc of all buys last year to about 40pc this year. So perhaps cash purchases are running at similar levels year on year but mortgage related purchases have ‘surged’


#385

Jeysus these levels are still fairly mickey mouse, but presented by the VIs as significant somehow,to draw in the naive.

The mortgage books have been running off at about 3bn a year, despite david hall’s best efforts, while annualising these figures would probably give you 3bn in new loans.

Life goes on people form households and people die off. Still doesn’t convince me anyway that property isn’t at least 1/3rd over fair value.


#386

The number of mortgages drawn down is back to 2011 levels:

The amount of mortgages drawn down is back to 2011 levels:

Taking 2011 as the base year and looking at movements in Q1 of subsequent years against that - and also looking at Year-on-Year movements:

And to put it all in perspective - the amount of drawdowns from 2005 to 2014 - with 2011 to 2014 highlighted:


#387

Nice graphs.

So at the rate of 2,500 drawdowns a year, if everyone in Ireland was queuing up it would take an average of about 1800 years to get a mortgage.

edit: read the axis wrong. At 15k/year it’s only 300 years!


#388

Thanks WGU…


#389

Or uses it to pay down debt.


#390

@WGU doesn’t look as surge-y from 2011 granted…

still more than 2500 per year @Eschatologist… more like 15,000 last year which is down a little bit ( :astonished: )since the heady days

in terms comparison i do think volume might be more appropriate when trying to work out ‘normal’ levels as it strips out boom (and bust?) price effects…but not the effect of the cash buyer of course

in any case I’m not denying both are off the cliff for sure and bumping along for a bit… however i do think that given all the other factors that are discussed here regularly the latest Q1 are strong figures and my guess would be the (relative) strength will continue and we would see 20000 for 2014 . Still very low in comparison with the volumes of the boom years yah but i for one would be happy to see more more supply, more mortgages, and lower prices…


#391

Taking IBF data on the number of mortgages drawn down and subtracting re-mortgages (generally 8%-14% of total) and comparing this with PPR data on sales we can get an approx. feel for cash buyers in the market. This shows the cash buyers are still around and far from dwindling, their numbers are increasing. In % terms they’ve varied between 39.3% and 62.9%, averaging 50.1%


#392

One of the most important and useful set of graphs, great stuff.

If we had those graphs dating back 40 years it would be very interesting.

does the data exist to create them?


#393

We only do “going forward” in this country…


#394

I don’t know, IBF/PWC data only goes back to Q1 2006 and PPR to start 2010. I couldn’t find annything of much use on CSO website and not sure where else would have that data


#395

Doesn’t your graph show their numbers decreasing in the latest quarter?


#396

i did do this one but didn’t post before… so i updated now to include the %mortgages

it did occur to me that the PPR probably lags the drawdowns…


#397

Sorry, I was away when these figures came out. Usual analysis

Analysis of the Q1 2014 IBF/Pwc Mortgage Market Profile figures
ibf.ie/Libraries/Research_St … .sflb.ashx

Mortgage Lending by Volume
Q2, 2013 2,892
Q3, 2013 4,089
Q4, 2014 4,804
Q1, 2014 3,160 (1,737 FTB + 1,206 Mover + 183 + RIL + 68*50% Re-Mortgage)

Total in past 12 months 14,945

Therefore,
average monthly sales volume from Q2 2013 to Q1 2014 is 1,245 (14,945/12)
average quarterly sales volume from Q2 2013 to Q1 2014 is 3,736 (14,945/4)

IBF states “We estimate that the data covers well in excess of 95% of the mortgage market.”

So let’s add 5%, making it 3,318 in Q1 2014 (3,160 x 1.05) or 1,106 mortgages a (3,160 x 1.05/3)

In comparison, Peak lending by Volume was Q4 2005 with 35,253 (+5% = 37,015) or 12,339 mortgages a month

This shows Q1 2014 is a whopping 91.04% lower by Volume than peak in Q2 2005 (3,318/37,015)

Mortgage Lending by Value €m
Q2, 2013 491
Q3, 2013 717
Q4, 2013 864
Q1, 2014 544 (263 FTB + 255 Mover + 21 RIL + 10*50% Re-Mortgage)

Total in past 12 months 2,616

Therefore,
average monthly sales volume from Q2 2013 to Q1 2014 is 218 (2,616/12)
average quarterly sales volume from Q2 2013 to Q1 2014 is 654 (2,616/4)

IBF states “We estimate that the data covers well in excess of 95% of the mortgage market.”

So let’s add 5%, making it €571m in Q1 2014 (€544m x 1.05) or €190m a month (€544m x 1.05/3)

In comparison, Peak lending by Value was Q3 2006 with €8,521m (+5% = €8,947) or €2,982m a month

This shows Q1 2014 is a whopping 93.62% lower by Value than peak in Q3 2006 (571m/8,947m)

Average Loan by Value €m
First-time Buyer (Q1 2014: 151,123vs Peak Q1 2008 251,831. Q1 2014 Fall since Peak 40.0%)
Mover Purchaser (Q1 2014: 21,602 x vs Peak Q1 2008 281,944. Q1 2014 Fall since Peak 24.9%)
Residential Investment Letting (Q1 2014: 115,172 vs Peak Q2 2008 327,927. Q1 2014 Fall since Peak 64.9%)
Re-mortgage (Q1 2014: 153,688 vs Peak Q1 2008 267,327. Q1 2014 Fall since Peak 42.5%)

Note 1: I exclude Top-ups, as IBF defines it as “a further mortgage advance to an existing borrower which is issued to finance expenditure other than house purchase.”

Note 2: I’ve included 50% of each quarter’s Re-Mortgages figure, as IBF defines it as “a loan which is issued by one lender to refinance an existing mortgage with another lender. This may or may not include further equity release.”


#398

Banks still aren’t lending or else no one has an appetite for taking out loans.

irishtimes.com/business/sect … -1.1815051

It appears whatever bump there was in the house market was from people with cash lying around doing nothing.


#399

Where’s the emoticon for “fake shock”?

Don’t worry, I’m assured the supply of cash in mattresses will never be exhausted.


#400

I assume the majority of the cash being released during sales of houses is going to clear down debt rather than to sustain continued sales in the property market.
I’m frightened for the future of the Irish economy. They’re borrowing 20bn a year to promote the economy and only getting very modest increases in employment and very slow improvement in bank balance sheets. There isn’t that much cash lying around to prime the economy so I don’t see how the economy can recover using this strategy of throwing money at it as there just isn’t enough money available.