Irish mortgage lending falling off a cliff....


#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

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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 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

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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

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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 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%

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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%

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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."


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

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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 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

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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

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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 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%

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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.