Irish mortgage lending falling off a cliff

mortgages

#571

Abso-fucking-lutely


#572

Analysis of the Q2 2020 BPFI / PwC Mortgage Market Profile figures

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Mortgage Lending by Volume

Q3 2019: 10,710

Q4 2109: 11,211

Q1 2020: 7,913

Q2 2020: 5,874 (3,285 FTB + 1,595 Mover + 155 RIL + 1,119*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q2 2020 5,874

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows Q2 2020 is -84.1% lower than Peak and +205.1% higher than Trough

.

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

.

c) Annual Change by Volume:

In Q3 2018 to Q2 2019 there were 37,736 mortgages by Volume or 3,145 per month

In Q3 2019 to Q2 2020 there were 35,709 mortgages by Volume or 2,976 per month

This shows a change of -5.4% from 12 months previously

.

Mortgage Lending by Value €m

Q3 2019: 2,523m

Q4 2109: 2,636m

Q1 2020: 1,888m

Q2 2020: 1,349m (736m FTB +391m Mover + 22m RIL +272m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q2 2020 1,349m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows Q2 2020 is -84.9% lower than Peak and +313.2% higher than Trough

.

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

.

c) Annual Change by Value:

In Q3 2018 to Q2 2019 8,632m was lent for mortgages by Value or 719m per month

In Q3 2019 to Q2 2020 8,397m was lent for mortgages by Value or 700m per month

This shows a change of -2.7% from 12 months previously

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Average Loan by Value €

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First-time Buyer

a) Change since Peak: Q2 2020 223,941 vs Peak Q1 2008 251,831. Fall since Peak -11.1%

b) Change since Trough: Q2 2020 223,941 vs Trough Q1 2013 150,292. Rise since Trough +49.0%

c) Annual change: Q2 2020 223,941 vs Q2 2019 225,597. Annual decrease -0.7%

Mover Purchaser

a) Change since Peak: Q2 2020 245,172 vs Peak Q1 2008 281,944. Fall since Peak -13.0%

b) Change since Trough: Q2 2020 245,172 vs Trough Q2 2013 197,756. Rise since Trough +24.0%

c) Annual change: Q2 2020 245,172 vs Q2 2019 255,064. Annual decrease -3.9%

.

Residential Investment Letting

a) Change since Peak: Q2 2020 143,364 vs Peak Q2 2008 327,927. Fall since Peak -56.3%

b) Change since Trough: Q2 2020 143,364 vs Trough Q2 2014 101,606. Rise since Trough +41.1%

c) Annual change: Q2 2020 143,364 vs Q2 2019 144,988. Annual decrease -1.1%

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Re-mortgage

a) Change since Peak: Q2 2020 243,167 vs Peak Q1 2008 267,327. Fall since Peak -9.0%

b) Change since Trough Q2 2020 243,167 vs Trough Q4 2012 136,174. Rise since Trough +78.6%

c) Annual change: Q2 2020 243,167 vs Q2 2019 231,992. Annual increase +4.8%

.

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."


House Prices Back at 2014 Price Levels?
#573

This guy plotted some graphs from the Bank of Ireland semi annual report data. Not looking too good on their confidence in their mortgage book. “basically they believe they don’t have a single safe mortgage left. Technically it’s not 0, it’s 1%, down from… 56%!”

https://twitter.com/jeuasommenulle/status/1296090262062628864?s=20


#574

Equally scary on that thread is the P/E ratios for the FAANG stocks…

Tesla: 977x
Amazon: 126x
Netflix: 82x
Microsoft: 37x
Apple: 35x
Google: 34x
Facebook: 32x

image

Sky News also reported on this today. The ratios are just below where the tech bubble burst in 2000. FAANG stocks are a large fraction of the S&P 500 growth. Minus tech stocks, the rest of the index is up only 5% in 28 months. Also reported today, Apple has just become the world’s first $2tn company, two years after it became the worlds first $1tn company. The increase in the last two years is greater than the GDP of 90% of the countries in the world! It’s nuts.


#575

The vibe is very much similar to the pre-pop era of the dot-com tech bubble…


#576

Analysis of the Q3 2020 BPFI / PwC Mortgage Market Profile figures

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bpfi.ie/wp-content/uploads/2020/10/BPFI-Mortgage-Drawdowns-Report-Q3-2020.pdf

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Mortgage Lending by Volume

Q4 2109: 11,211

Q1 2020: 7,913

Q2 2020: 5,874

Q3 2020: 7,380 (4,217 FTB + 2,007 Mover + 172 RIL + 1,266*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q3 2020 7,380

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows Q3 2020 is -80% lower than Peak and +283% higher than Trough

.

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

.

c) Annual Change by Volume:

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

In Q4 2019 to Q3 2020 there were 32,379 mortgages by Volume or 2,698 per month

This shows a change of -16% from 12 months previously

.

Mortgage Lending by Value €m

Q4 2109: 2,636m

Q1 2020: 1,888m

Q2 2020: 1,349m

Q3 2020: 1,835m (1,035m FTB +527m Mover + 25m RIL +322m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q3 2020: 1,835m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows Q3 2020 is -79.5% lower than Peak and +462% higher than Trough

.

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

.

c) Annual Change by Value:

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

In Q4 2019 to Q3 2020 7,709m was lent for mortgages by Value or 642m per month

This shows a change of -13.4% from 12 months previously

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Average Loan by Value €

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First-time Buyer

a) Change since Peak: Q3 2020 245,442 vs Peak Q1 2008 251,831. Fall since Peak -2.5%

b) Change since Trough: Q3 2020 245,442 vs Trough Q1 2013 150,292. Rise since Trough +63.3%

c) Annual change: Q3 2020 245,442 vs Q3 2019 228,415. Annual increase +7.5%

Mover Purchaser

a) Change since Peak: Q3 2020 262,309 vs Peak Q1 2008 281,944. Fall since Peak -7.0%

b) Change since Trough: Q3 2020 262,309 vs Trough Q2 2013 197,756. Rise since Trough +32.6%

c) Annual change: Q3 2020 262,309 vs Q3 2019 258,496. Annual increase +1.5%

.

Residential Investment Letting

a) Change since Peak: Q3 2020 145,262 vs Peak Q2 2008 327,927. Fall since Peak -55.7%

b) Change since Trough: Q3 2020 145,262 vs Trough Q2 2014 101,606. Rise since Trough +43.0%

c) Annual change: Q3 2020 145,262 vs Q3 2019 146,932. Annual decrease -1.1%

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Re-mortgage

a) Change since Peak: Q3 2020 254,147 vs Peak Q1 2008 267,327. Fall since Peak -4.9%

b) Change since Trough Q3 2020 254,147 vs Trough Q4 2012 136,174. Rise since Trough +86.6%

c) Annual change: Q3 2020 254,147 vs Q3 2019 232,604. Annual increase +9.3%

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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."


#577

Deposits in Irish banks hit record high - Central Bank (rte.ie)

Loans to households did increase in October, but levels are sharply down on a year ago.

For households, the drawdown of loans exceeded repayments by €19m. This compares to €1.9 billion of loans over repayments in October 2019.

Mortgage lending, however, is growing at a little over half the rate it was a year ago.

Mortgages grew by €97m in October, an annual increase of 0.9%. Home lending was increasing at a rate of 1.7% a year ago.

Mortgage lending is running at its lowest annual rate since July 2018, the Central Bank noted.

Consumer lending did increase by €31m in October but repayments exceed loans on an annual basis by €533m - a decrease in net lending of 4.1% in a year.

Companies repaid more than they borrowed in October to the tune of €363m.


#578

Irish bank lending recovery to ‘falter’ as lockdown extended, Davy says

Irish banks are likely to see a recovery in lending and business activity faltering in the first quarter as the Government is set to extend the current Level 5 lockdown until March 5th, according to stockbroking firm Davy.

Still, Davy analyst Diarmaid Sheridan said he does not expect lenders to need to book material additional loan-loss provisions after setting aside large amounts last year, and as they continue to extend forbearance on a case-by-case basis. The main banks, including Bank of Ireland and AIB, reported last autumn that lending and other business activity had recovered more than expected from a sharp slump at the start of the Covid-19 crisis.

“The extension of the restrictions will impact the recovery seen in Q3 and Q4 2020, and will likely hit new lending during Q1 (seasonally the weakest quarter for new lending) given the restrictions on new construction, house buying and a probable conservative approach from businesses in advance of loosening of restrictions,” said Mr Sheridan. Q3 refers to the third quarter.

“However, activity levels will not fall to the same extent as Q2 2020, given the businesses have adapted their offerings away from bricks and mortar.”

Meanwhile, Minister for Finance Paschal Donohoe has said there will be no “cliff-edge” withdrawal of Government Covid-19 supports for businesses and households this year. Billions of euro injected into the economy during the crisis have served to help borrowers meet their obligations. However, economists expect a spike in defaults this year, particularly in the hospitality, tourism and non-essential retail sectors, as a result of a series of coronavirus restrictions since last March.

https://www.irishtimes.com/business/financial-services/irish-bank-lending-recovery-to-falter-as-lockdown-extended-davy-says-1.4468109


#579

Analysis of the Q4 2020 BPFI / PwC Mortgage Market Profile figures

.

.

Mortgage Lending by Volume

Q1 2020: 7,913

Q2 2020: 5,874

Q3 2020: 7,380

Q4 2020: 11,394

(6,884 FTB + 3,031 Mover + 249 RIL + 688*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q4 2020 11,394

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows Q4 2020 is -69.2% lower than Peak and +491.8% higher than Trough

.

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

.

c) Annual Change by Volume:

In Q1 2019 to Q4 2019 there were 38,771 mortgages by Volume or 3,231 per month

In Q1 2020 to Q4 2020 there were 32,504 mortgages by Volume or 2,709 per month

This shows a change of -16.2% from 12 months previously

.

Mortgage Lending by Value €m

Q1 2020: 1,888m

Q2 2020: 1,349m

Q3 2020: 1,835m

Q4 2020: 2,854m

(1,683m FTB + 828m Mover + 37m RIL +341m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q4 2020: 2,854m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows Q4 2020 is -68.1% lower than Peak and +774.1% higher than Trough

.

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

.

c) Annual Change by Value:

In Q1 2019 to Q4 2019 9,051m was lent for mortgages by Value or 754m per month

In Q1 2020 to Q4 2020 7,928m was lent for mortgages by Value or 661m per month

This shows a change of -12.4% from 12 months previously

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Average Loan by Value €

Excel sheet has still not been updated by BPFI for Q4 2020 so no data available.
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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.

.

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.”

.

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."


#580

I know its anecdotal, but would know a few brokers who deal with mortgages, big players, said they are flat out, loads of approvals. Are approvals collated?


#581

V interesting.

Mortgages up in Q4 2020 from previous quarter but well down YoY.

Id guess Cliff drop likely again for q1 2021 and upwards thereafter.

Ultinately volumes remain low enough tallying with my own observation of houses sitting for sale for months on end ie there is no real functioning market in the true sense at present and many are driven by Covid related lifestyle changes. I dont believe that is sustainabe in market terms. But nobody really knows.

Thanks for posting this stuff.


#582

Mortgage Approvals are published monthly alright


#583

Quick question, I will be making the FINAL :smile: payment on my mortgage in 4 weeks time, what happens then as far as the bank having a stake in the property?

Do they simply remove the banks interest from the deeds and send them to me or what?
Is there anything I need to do?

Thanks


#584

Congrats Dolanbaker. I’m interested in finding this out as well


#585

I don’t work in residential property mortgages, but I do work in asset finance where mortgages are routinely used. In most cases you have to initiated the removal of the charge against your property. In addition you should be checking the return of your property deeds etc and anything else your bank holds as part of their security.

Congratulations


#586

Thanks for that, I will check with the bank after the final payment has been taken.


#587

You may want to engage with a solicitor, simply to ensure the charge is removed. Not sure how to check the registry of charges / mortgages - so if anyone knows do share


#588

So mortgage approvals are up but lending is down.

Lack of supply so?

Or the pickup in the lending to be seen in Q1-Q2 2021?


#589

Is there really a lack of supply beyond SCD?

Numerous properties in commuter belt sitting on the market since last Spring with no change.


#590

Analysis of the Q1 2021 BPFI / PwC Mortgage Market Profile figures

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Mortgage Lending by Volume

Q2 2020: 5,873

Q3 2020: 7,338

Q4 2020: 11,394

Q1 2021: 8,383

(4,719 FTB + 2,334 Mover + 241 RIL + 1,380*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

a) Current v Peak and Trough by Volume:

Current: Q1 2021 8,383

Peak: Q4 2005 37,015

Trough: Q1 2013 1,925

This shows current quarter is -77.1% lower than Peak and +335.5% higher than Trough

.

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

.

c) Annual Change by Volume:

In Q2 2019 to Q1 2020 there were 38,967 mortgages by Volume or 3,247 per month

In Q2 2020 to Q1 2020 there were 32,988 mortgages by Volume or 2,749 per month

This shows a change of -15.3% from 12 months previously

.

Mortgage Lending by Value €m

Q2 2020: 1,349m

Q3 2020: 1,835m

Q4 2020: 2,854m

Q1 2021: 2,033m

(1,087m FTB + 646m Mover + 36m RIL +334m*50% Re-Mortgage + 5% per Notes 1-3)

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Analysis

Current v Peak and Trough by Value €m:

Current: Q1 2021: 2,033m

Peak: Q3 2006 8,947m

Trough: Q1 2013 327m

This shows current quarter is -77.3% lower than Peak and +522.5% higher than Trough

.

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

.

c) Annual Change by Value:

In Q2 2019 to Q1 2020 9,172m was lent for mortgages by Value or 764m per month

In Q2 2020 to Q1 2021 8,072m was lent for mortgages by Value or 673m per month

This shows a change of -12.0% from 12 months previously

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Average Loan by Value €

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First-time Buyer

a) Change since Peak: Q1 2021 230,451 vs Peak Q1 2008 251,831. Fall since Peak -8.5%

b) Change since Trough: Q1 2021 230,451 vs Trough Q1 2013 150,292. Rise since Trough +53.3%

c) Annual change: Q1 2021 230,451 vs Q1 2020 230,585. Annual decrease -0.1%

Mover Purchaser

a) Change since Peak: Q1 2021 276,697 vs Peak Q1 2008 281,944. Fall since Peak -1.9%

b) Change since Trough: Q1 2021 276,697 vs Trough Q2 2013 197,756. Rise since Trough +39.9%

c) Annual change: Q1 2021 276,697 vs Q1 2020 264,446. Annual increase +4.6%

.

Residential Investment Letting

a) Change since Peak: Q1 2021 149,145 vs Peak Q2 2008 327,927. Fall since Peak -54.5%

b) Change since Trough: Q1 2021 149,145 vs Trough Q2 2014 101,606. Rise since Trough +46.8%

c) Annual change: Q1 2021 149,145 vs Q1 2020 150,285. Annual decrease -0.8%

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Re-mortgage

a) Change since Peak: Q1 2021 241,732 vs Peak Q1 2008 267,327. Fall since Peak –9.6%

b) Change since Trough Q1 2021 241,732 vs Trough Q4 2012 136,174. Rise since Trough +77.5%

c) Annual change: Q1 2021 241,732 vs Q1 2020 238,122. Annual increase +1.5%

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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.

.

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.”

.

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."