I’m surprised mortgage lending is still growing at all, albeit at a reduced rate… any predictions on if and when it will contract, year on year?
I recall this being discussed on the Pin before - I think it has to do with them defining “growth” in lending as any new loans sold therefore new loans sold would have to drop off to below the level of total repayments in that given time period (which is comparitively miniscule) for them to describe loans as “contracting”. Realistically this is never going to happen, hence the confusing use of the “growth” terminology when in actual fact the figures have fallen off a cliff.
I always wondered about that myself, i figured that it must be calculated on the addition to base amount of mortgages rather than the on base amount + the addition i.e. if mortgage lending grew 11.6% from a year earlier there it doesnt mean that the same amount of mortages as last year were taken out + 11.6% more, I thought that 11.6% of the total mortages were taken out in addtion to the amount already present…
Not sure if I am being clear on what I am trying to say - and I have no basis for it but this is the only way it made sense to me that even though things have slowed dramatically - the rate was still positive (and will always be positive unless nobody takes out a mortgage and some people pay off theirs in the meantime)
Look at the total NEW money injected into the economy . Remember that old mortgages being retired in 2006 were 20 year loans granted in 1986 at 1986 prices, thereofe tiny and insignificant .
- In 2006 €40bn of mortgage lending
- In 2008 €25bn of mortgage lending , down €15bn or about 10% of GNP on 2006
- In 2009 €15bn of mortgage lending , down €25bn or about 16% of GNP on 2006
Page 9 of 27
Unless my eyes deceive me, the level of outstanding mortgages is reducing in March,
something that has not happened in YEARS!
Outstanding UNADJUSTED level of Residential Mortgage lending(Millions)
January 2008 123,981
Febraury 2008 124,888
March 2008 124,385
Or am I misunderstanding the figures?
Look at the column to the right which adjusts for securitisation. Still rising, at around €142bn