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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Tue Jul 31, 2018 4:07 pm 
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Analysis of the Q2 2018 BPFI / PwC Mortgage Market Profile figures

https://www.bpfi.ie/publications/bpfi-m ... drawdowns/

Mortgage Lending by Volume
Q3 2017: 8,894
Q4 2017: 9,662
Q1 2018: 7,231
Q2 2018: 8,435 (4,547 FTB + 2,495 Mover + 339 RIL + 1,304*50% Re-Mortgage + 5% per Notes 1-3)

Analysis
a) Current v Peak and Trough by Volume:
Current: Q2 2018 8,435
Peak: Q4 2005 37,015
Trough: Q1 2013 1,925
This shows Q2 2018 is - 77.2% lower than Peak and + 338.1% 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 2016 to Q2 2017 there were 29,973 mortgages by Volume or 2,498 per month
In Q3 2017 to Q2 2018 there were 34,221 mortgages by Volume or 2,852 per month
This shows a change of +14.2% from 12 months previously


Mortgage Lending by Value €m
Q3 2017: 1,967m
Q4 2017: 2,162m
Q1 2018: 1,630m
Q2 2018: 1,905m (983m FTB + 635m Mover + 47m RIL +298*50% Re-Mortgage + 5% per Notes 1-3)

Analysis
a) Current v Peak and Trough by Value €m:
Current: Q2 2018 1,905m
Peak: Q3 2006 8,947m
Trough: Q1 2013 327m
This shows Q2 2018 is -78.7% lower than Peak and +483.3% 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 2016 to Q2 2017 6,220m was lent for mortgages by Value or 518m per month
In Q3 2017 to Q2 2018 7,663m was lent for mortgages by Value or 639m per month
This shows a change of +23.2% from 12 months previously


Average Loan by Value €

First-time Buyer
a) Change since Peak: Q2 2018 216,096 vs Peak Q1 2008 251,831. Fall since Peak -14.2%
b) Change since Trough: Q2 2018 216,096 vs Trough Q1 2013 150,292. Rise since Trough +43.8%
c) Annual change: Q2 2018 216,096 vs Q2 2017 200,728. Annual increase +7.7%

Mover Purchaser
a) Change since Peak: Q2 2018 254,586 vs Peak Q2 2008 327,927. Fall since Peak -9.7%
b) Change since Trough: Q2 2018 254,586 vs Trough Q2 2014 101,606. Rise since Trough +28.7%
c) Annual change: Q2 2018 254,586 vs Q2 2017 248,826. Annual increase +2.3%

Residential Investment Letting
a) Change since Peak: Q2 2018 138,943 vs Peak Q1 2008 267,327. Fall since Peak -57.6%
b) Change since Trough: Q2 2018 138,943 vs Trough Q4 2012 136,174. Rise since Trough +36.7%
c) Annual change: Q2 2018 138,943 vs Q2 2017 131,181. Annual increase +5.9%

Re-mortgage
a) Change since Peak: Q2 2018 228,302 vs Peak Q1 2008 267,327. Fall since Peak -14.6%
b) Change since Trough: Q2 2018 228,302 vs Trough Q4 2012 136,174. Rise since Trough +67.7%
c) Annual change: Q2 2018 228,302 vs Q2 2017 230,615. Annual decrease -1.0%


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."

EDIT 1/1/18: fixed few errors in tots


Last edited by TheJackal on Thu Nov 01, 2018 2:27 pm, edited 1 time in total.

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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Thu Nov 01, 2018 2:20 pm 
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Posts: 5209
Analysis of the Q3 2018 BPFI / PwC Mortgage Market Profile figures

https://www.bpfi.ie/wp-content/uploads/ ... ebsite.pdf

Mortgage Lending by Volume
Q4 2017: 9,662
Q1 2018: 7,231
Q2 2018: 8,435
Q3 2018: 9,909 (5,247 FTB + 3,077 Mover + 403 RIL + 1,420*50% Re-Mortgage + 5% per Notes 1-3)

Analysis
a) Current v Peak and Trough by Volume:
Current: Q3 2018 9,909
Peak: Q4 2005 37,015
Trough: Q1 2013 1,925
This shows Q3 2018 is - 73.2% lower than Peak and + 414.7% 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 2016 to Q32017 there were 31,275 mortgages by Volume or 2,606 per month
In Q4 2017 to Q3 2018 there were 35,236 mortgages by Volume or 2,936 per month
This shows a change of +12.7% from 12 months previously


Mortgage Lending by Value €m
Q4 2017: 2,162m
Q1 2018: 1,630m
Q2 2018: 1,905m
Q3 2018: 2,256m (1,153m FTB +776 Mover + 57m RIL +325*50% Re-Mortgage + 5% per Notes 1-3)

Analysis
a) Current v Peak and Trough by Value €m:
Current: Q3 2018 2,256m
Peak: Q3 2006 8,947m
Trough: Q1 2013 327m
This shows Q3 2018 is -74.8% lower than Peak and +590.8% 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 2016 to Q3 2017 6,671m was lent for mortgages by Value or 556m per month
In Q4 2017 to Q3 2018 7,953m was lent for mortgages by Value or 663m per month
This shows a change of +19.2% from 12 months previously


Average Loan by Value €

First-time Buyer
a) Change since Peak: Q3 2018 219,779 vs Peak Q1 2008 251,831. Fall since Peak -12.7%
b) Change since Trough: Q3 2018 219,779 vs Trough Q1 2013 150,292. Rise since Trough +46.2%
c) Annual change: Q3 2018 219,779 vs Q3 2017 206,856. Annual increase +6.2%

Mover Purchaser
a) Change since Peak: Q3 2018 252,076 vs Peak Q2 2008 327,927. Fall since Peak -10.6%
b) Change since Trough: Q3 2018 252,076 vs Trough Q2 2014 101,606. Rise since Trough +27.5%
c) Annual change: Q3 2018 252,076 vs Q3 2017 256,159. Annual decrease -1.6%

Residential Investment Letting
a) Change since Peak: Q3 2018 140,215 vs Peak Q1 2008 267,327. Fall since Peak -57.2%
b) Change since Trough: Q3 2018 140,215 vs Trough Q4 2012 136,174. Rise since Trough +38.0%
c) Annual change: Q3 2018 140,215 vs Q3 2017 126,796. Annual increase +10.6%

Re-mortgage
a) Change since Peak: Q3 2018 228,786 vs Peak Q1 2008 267,327. Fall since Peak -14.4%
b) Change since Trough: Q3 2018 228,786 vs Trough Q4 2012 136,174. Rise since Trough +68.0%
c) Annual change: Q3 2018 228,786 vs Q3 2017 229,525. Annual decrease -0.3%


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."


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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Thu Nov 01, 2018 2:21 pm 
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Why has lending for mortgages in Ireland suddenly stalled?

https://www.irishtimes.com/business/per ... -1.3682825


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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Fri Nov 02, 2018 12:02 pm 
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Joined: Sep 9, 2017
Posts: 336
In the midst of boom, we are in the death of the mortgage contract

Lending at 1988 levels

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

By Brian Finn
Business Journalist

The numbers of people seeking approval to buy a home showed signs of 'flatlining' in September, according to the Banking and Payments Federation.
The Federation said that 11,000 people drew down mortgages in the three months to September in what was considered to have been a fairly strong quarter for mortgage lending.
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,"
he stated.

In terms of the flat-lining concerns raised by the Banking and Payments Federation, the Central Bank lending rules appear to be squeezing potential buyers. "First-time buyers are hitting that ceiling of 3.5 times income multiple in terms of lending capacity. The other side is the supply of properties. That hasn't taken off."
So is it time to look at loosening the Central Bank lending restrictions? Not according to Frank Conway. "The Central Bank regulations are very good. They need a period of stability for people to work into - the biggest issue in the housing market is supply."
The banks here have come in for criticism over the high rates that they charge on mortgage borrowing compared to their European peers. Much of that has to do with the reluctance to repossess properties. "Repossession rates are very low here against the overall arrears rates. Lenders have worked with borrowers but the maths are problematic for them. They can't take back the property so it almost becomes a sort of unsecured lending," the money expert said.
The high level of non-performing loans are likely to emerge as a problem for the Irish banks in the latest stress tests, the results of which are due to be published today. AIB and Bank of Ireland, however, are expected to fare better than the second and fourth positions from the bottom achieved in the last round of tests in 2011.



https://www.rte.ie/news/business/2018/1102/1008192-mortgage-lending-here-at-about-1988-levels/

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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Fri Nov 02, 2018 10:57 pm 
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Joined: Aug 2, 2011
Posts: 1248
TheJackal wrote:
Why has lending for mortgages in Ireland suddenly stalled?

https://www.irishtimes.com/business/per ... -1.3682825


Q4 2017: 9,662
Q1 2018: 7,231
Q2 2018: 8,435
Q3 2018: 9,909

I can't read beyond the IT paywall but your figures indicate it hasn't stalled (where stall is understood in the usual sense of the word: stop/halt/nosedive. Maybe they are referring to a halt in growth?


Quote:
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.


Lest it be forgotten, in 1988 those 36,000 drawdowns would, in all likelyhood, have involved a single earner. It now takes two earners to buy the same house today. That's one big transfer of wealth.


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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Sat Nov 03, 2018 2:29 pm 
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Joined: Mar 17, 2008
Posts: 1004
york wrote:
TheJackal wrote:
Why has lending for mortgages in Ireland suddenly stalled?

https://www.irishtimes.com/business/per ... -1.3682825


Q4 2017: 9,662
Q1 2018: 7,231
Q2 2018: 8,435
Q3 2018: 9,909

I can't read beyond the IT paywall but your figures indicate it hasn't stalled (where stall is understood in the usual sense of the word: stop/halt/nosedive. Maybe they are referring to a halt in growth?


Quote:
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.


Lest it be forgotten, in 1988 those 36,000 drawdowns would, in all likelyhood, have involved a single earner. It now takes two earners to buy the same house today. That's one big transfer of wealth.


I think there are a number of reasons why mortgage drawdowns are lower -

1. The age of the average house buyer has gone back up to the level that it was in the late 1980s i.e. over 30. The era of 25 year olds buying houses (i.e. the last boom) was an anomaly.
2. The people in the majority house buying cohort (i.e. the 30-40s) that can afford to buy a house is lower - for one of the reasons that it was in the late 1980s - house prices were too expensive relative to wages (the other was emigration)
3. Using the increase in population is not a good measure - we have a large number of people who have come to work here - but not with the intention of staying here for ever - the current state of the housing market is not encouraging them to do so
4. The concept of people buying a starter home (on their own) , then a forever home (with someone else) is gone. Buying and selling two properties in a short time frame is too expensive, and too risky - prices fluctuate relatively rapidly in this country and it is difficult to sell and buy in the same market. There has also been a feeling that supply is restricted - I don't think it is at the moment - there are 5600 houses for sale in Dublin on Myhome - in November!


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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Sat Nov 03, 2018 3:55 pm 
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Posts: 5469
metalmike wrote:
1. The age of the average house buyer has gone back up...The concept of people buying a starter home (on their own) , then a forever home (with someone else) is gone

These factors are directly related, and also related to the longer amount of time it takes to get established in the jobs market.

Even with a relatively boring, frugal lifestyle you're going to be late 20s before you have enough deposit to buy an apartment, most people will be over 30. So they're just skipping that stage and going straight to co-ownership.

metalmike wrote:
prices fluctuate relatively rapidly in this country and it is difficult to sell and buy in the same market


I don't think the price volatility is the issue since selling and buying need to be done at the same time. That is difficult due to lack of bridging finance and long transaction time. If it takes months to sell and months to buy, lining up those two events is tricky.

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 Post subject: Re: Irish mortgage lending falling off a cliff....
PostPosted: Mon Nov 05, 2018 9:49 am 
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Posts: 5209
york wrote:
TheJackal wrote:
Why has lending for mortgages in Ireland suddenly stalled?

https://www.irishtimes.com/business/per ... -1.3682825


Q4 2017: 9,662
Q1 2018: 7,231
Q2 2018: 8,435
Q3 2018: 9,909

I can't read beyond the IT paywall but your figures indicate it hasn't stalled (where stall is understood in the usual sense of the word: stop/halt/nosedive. Maybe they are referring to a halt in growth?


Yes, slow in growth as opposed to the drop in overall mortgage drawdowns. It's a poor headline for the article

Quote:
Mortgage lending is stalling. Having grown very strongly over the past couple of years, the latest figures show that growth in new loan approvals has now slowed sharply


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