Irish mortgage lending falling off a cliff....


#547

Analysis of the Q2 2019 BPFI / PwC Mortgage Market Profile figures

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Mortgage Lending by Volume

Q3 2018: 9,909

Q4 2018: 10,983

Q1 2019: 7,704

Q2 2019: 9,146 (5,040 FTB + 2,644 Mover + 303 RIL + 1,447*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q2 2019 9,146

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows Q2 2019 is -75.3% lower than Peak and +375.1% higher than Trough

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b) Change from Peak and Trough lending by Volume:

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows a change of -94.8% from highest to lowest Volume of mortgages

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c) Annual Change by Volume:

In Q3 2017 to Q2 2018 there were 34,221 mortgages by Volume or 2,852 per month

In Q3 2018 to Q2 2019 there were 37,742 mortgages by Volume or 3,145 per month

This shows a change of +10.3% from 12 months previously

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Mortgage Lending by Value €m

Q3 2018: 2,256m

Q4 2018: 2,484m

Q1 2019: 1,767m

Q2 2019: 2,124m (1,137m FTB +674m Mover + 44m RIL +336m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q2 2019 2,124m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows Q22019 is -76.3% lower than Peak and +550.5% higher than Trough

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b) Change from Peak and Trough lending by Value:

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows a change of -96.4% from highest to lowest by Value of mortgages

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c) Annual Change by Value:

In Q3 2016 to Q2 2018 7,666m was lent for mortgages by Value or 639m per month

In Q3 2017 to Q2 2019 8,632m was lent for mortgages by Value or 719m per month

This shows a change of +12.6% from 12 months previously

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Average Loan by Value €

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First-time Buyer

a) Change since Peak: Q2 2019 225,597 vs Peak Q1 2008 251,831. Fall since Peak -10.4%

b) Change since Trough: Q2 2019 225,597 vs Trough Q1 2013 150,292. Rise since Trough +50.1%

c) Annual change: Q2 2019 225,597 vs Q2 2018 216,096. Annual increase +4.4%

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Mover Purchaser

a) Change since Peak: Q2 2019 255,064 vs Peak Q2 2008 327,927. Fall since Peak -9.5%

b) Change since Trough: Q2 2019 255,064 vs Trough Q2 2014 101,606. Rise since Trough +29.0%

c) Annual change: Q2 2019 255,064 vs Q2 2018 254,586. Annual decrease +0.2%

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Residential Investment Letting

a) Change since Peak: Q2 2019 144,988 vs Peak Q1 2008 267,327. Fall since Peak -55.8%

b) Change since Trough: Q2 2019 144,988 vs Trough Q4 2012 136,174. Rise since Trough +42.7%

c) Annual change: Q2 2019 144,988 vs Q2 2018 138,943. Annual increase +4.4%

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Re-mortgage

a) Change since Peak: Q2 2019 231,992 vs Peak Q1 2008 267,327. Fall since Peak -13.2%

b) Change since Trough Q2 2019 231,992 vs Trough Q4 2012 136,174. Rise since Trough +70.4%

c) Annual change: Q2 2019 231,992 vs Q2 2018 228,302. Annual increase +1.6%

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Note 1: BPFI states "We estimate that the data covers well in excess of 95% of the mortgage market." So I add 5% to the Volume and Value figures.

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Note 2: I’ve included 50% of each quarter’s Re-Mortgages figure, as BPFI 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.”

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Note 3: I exclude Top-ups, as BPFI defines it as "a further mortgage advance to an existing borrower which is issued to finance expenditure other than house purchase."


#548

Analysis of the Q3 2019 BPFI / PwC Mortgage Market Profile figures

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Mortgage Lending by Volume

Q4 2018: 10,978

Q1 2019: 7,704

Q2 2019: 9,146

Q3 2019: 10,710 (5,999 FTB + 3,178 Mover + 309 RIL + 1,428*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q3 2019 10,710

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows Q3 2019 is -71.1% lower than Peak and +456.3% higher than Trough

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b) Change from Peak and Trough lending by Volume:

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows a change of -94.8% from highest to lowest Volume of mortgages

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c) Annual Change by Volume:

In Q4 2017 to Q3 2018 there were 35,236 mortgages by Volume or 2,936 per month

In Q4 2018 to Q3 2019 there were 38,538 mortgages by Volume or 3,211 per month

This shows a change of +9.4% from 12 months previously

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Mortgage Lending by Value €m

Q4 2018: 2,484m

Q1 2019: 1,767m

Q2 2019: 2,124m

Q3 2019: 2,523m (1,370m FTB +822m Mover + 45m RIL +332m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q3 2019 2,523m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows Q3 2019 is -71.8% lower than Peak and +672.7% higher than Trough

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b) Change from Peak and Trough lending by Value:

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows a change of -96.4% from highest to lowest by Value of mortgages

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c) Annual Change by Value:

In Q4 2017 to Q3 2018 7,953m was lent for mortgages by Value or 663m per month

In Q4 2018 to Q3 2019 8,899m was lent for mortgages by Value or 742m per month

This shows a change of +11.9% from 12 months previously

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Average Loan by Value €

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First-time Buyer

a) Change since Peak: Q3 2019 228,415 vs Peak Q1 2008 251,831. Fall since Peak -9.3%

b) Change since Trough: Q3 2019 228,415 vs Trough Q1 2013 150,292. Rise since Trough +52.0%

c) Annual change: Q3 2019 228,415 vs Q3 2018 219,779. Annual increase +3.9%

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Mover Purchaser

a) Change since Peak: Q3 2019 258,496 vs Peak Q1 2008 281,944. Fall since Peak -8.3%

b) Change since Trough: Q3 2019 258,496 vs Trough Q2 2013 197,756. Rise since Trough +30.7%

c) Annual change: Q3 2019 258,496 vs Q3 2018 252,076. Annual increase +2.5%

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Residential Investment Letting

a) Change since Peak: Q3 2019 146,932 vs Peak Q2 2008 327,927. Fall since Peak -55.2%

b) Change since Trough: Q3 2019 146,932 vs Trough Q2 2014 101,606. Rise since Trough +44.6%

c) Annual change: Q3 2019 146,932 vs Q3 2018 140,215. Annual increase +4.8%

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Re-mortgage

a) Change since Peak: Q3 2019 232,604 vs Peak Q1 2008 267,327. Fall since Peak -13.0%

b) Change since Trough Q3 2019 232,604 vs Trough Q4 2012 136,174. Rise since Trough +70.8%

c) Annual change: Q3 2019 232,604 vs Q3 2018 228,786. Annual increase +1.7%

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Note 1: BPFI states "We estimate that the data covers well in excess of 95% of the mortgage market." So I add 5% to the Volume and Value figures.

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Note 2: I’ve included 50% of each quarter’s Re-Mortgages figure, as BPFI 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.”

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Note 3: I exclude Top-ups, as BPFI defines it as "a further mortgage advance to an existing borrower which is issued to finance expenditure other than house purchase."


#549

Circa 38,500 over 12 months. Worth putting this into context with this article from 12 months ago:

Mortgage lending here at about 1988 levels
Updated / Friday, 2 Nov 2018 10:28

However, Frank Conway, founder of the Irish Financial Review and Moneywhizz, said it was still a fairly anaemic market. “The market has been recovering since the lowest point in 2011. It’s been coming back slowly. Last year we had around 30,000 mortgages for first and second time borrowers and investors. In the overall context, looking back to the 1970s, we’re looking at 1988 levels of lending. That’s around 36,000 mortgage drawdowns for the full year,” he said.
Ideally, Frank Conway says we should be aiming for in or around 50,000 mortgage drawdowns a year. “Take the population growth from 1988 to now - around 1.2 million. We should be up at around 46,000 - probably a bit more. We’re well off that track in terms of overall lending


#550

And according to the Central Bank Credit to Irish households actually contracted in net terms between September 2018 and September 2019.

September 2018 €91,862m
September 2019 €91,752m

In contrast deposits from Irish households continue to boom.
September 2018 €194,063m
September 2019 €209,095m

And that’s even before the Nigerian remittances :ninja:

What a fine example of deleveraging this has been by Irish households. More bad news for the Banks

Source: Table A1


#551

Potentially good news for a bail-in for the banks though.


#552

New Central Bank chief hints at no change to mortgage rules
The new governor of the Central Bank has hinted there will be no changes to the increasingly unpopular mortgage rules. In his first speech since taking up his role in September, Gabriel Makhlouf said the focus of the bank would be to ensure the economy remained resilient and to prevent shocks from emerging. The bank is due to make a decision on whether to amend its macro-prudential rules, which set down deposit requirements and income levels needed by home buyers, in the coming weeks.
(Business Post)