Mortgage drawdowns for first-time buyers in 2023 reached highest level since 2007 at almost 26,000 mortgages, despite overall slowdown in activity – BPFI
- Overall mortgage activity declined in 2023, largely driven by a sharp drop in switching
- Average FTB drawdown increased to €282,084 in 2023, up from €264,621 year on year, its highest level since the data series began in 2003
- FTB mortgage approvals values rose by 15.9% in 2023, valued at more than €8.8 billion
Friday 26th January 2024 – Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Drawdowns Report for Q4 2023 and the BPFI Mortgage Approvals Report for December 2023.
The following are the key figures from the Mortgage Drawdowns Report for Q4 2023:
- A total of 11,584 new mortgages to the value of €3,289 million were drawn down by borrowers during the fourth quarter of 2023.
- This represents a decrease of 27.1% in volume and 24.4% in value on the corresponding fourth quarter of 2022.
- A comparison with the previous quarter (Q3 2023) shows a decrease of 0.3% in volume and increase of 3.7% in value.
- First-time buyers (FTBs) remained the single largest segment by volume (62.7%) and by value (63.9%).
- Re-mortgage/switching volumes and values fell by 79.6% and 81.7% year on year respectively.
In addition, BPFI also published today the latest figures from the BPFI Mortgage Approvals Report for December 2023:
- A total of 2,793 mortgages were approved in December 2023 – some 1,693 were for FTBs (60.6% of total volume), while mover purchasers accounted for 637 (22.8%).
- The number of mortgages approved in December fell by 33.5% month-on-month and fell by 23.2% year-on-year.
- Mortgages approved in December 2023 were valued at €799 million – of which FTBs accounted for €491 million (60.6%) and €216 million by mover purchasers (22.8%).
- The value of mortgage approvals fell by 33.8% month-on-month and 19.8% year-on-year.
- Re-mortgage/switching activity fell by 68.6% year on year in volume terms and by 71.8% in value in the same period.
Speaking on the publication of the reports, Brian Hayes, Chief Executive, BPFI said: “Our latest mortgage data, which provides an annual picture for 2023, shows another strong year for first-time buyers (FTBs) who have dominated the mortgage market in recent months. Nonetheless, we’ve seen an overall slowdown in both mortgage drawdown and approval activity, largely driven by a sharp drop in re-mortgage/switching activity.”
“The number of FTB drawdowns reached a new peak at almost 26,000 (25,591) valued at over €7.2 billion (7,219 million) in 2023, the highest annual levels since 2007, albeit FTB volumes dropped by 2.3% year on year in Q4 2023. Looking at the average FTB mortgage drawdown, we can see it increased to €282,084, up from €264,621 a year earlier. This is the highest level since the data series began in 2003 and the tenth consecutive year in which it increased.”
Mr. Hayes continued: “Looking at FTB mortgage approvals meanwhile, there were almost 30,500 (30,454) FTB mortgages, valued at more than €8.8 billion, approved in 2023. This was a rise of 8.9% and 15.9% in volume and value terms respectively, compared to 2022.”
“However, despite robust FTB activity, total mortgage drawdowns and approvals declined in 2023. Annual mortgage drawdown volumes fell by 17.2% to 43,587 while approval volumes fell by 14.4% to 49,898. This drop was mainly due to a 63.5% decline in re-mortgage/switching activity in 2023 having more than doubled (up 107.7%) in 2022.”
Mr. Hayes concluded: “Looking ahead for 2024, we expect housing and mortgage demand to remain strong, notwithstanding the expected slowdown in Irish economic growth. We have seen housing output increasing significantly in the past two years and the potential output for 2024 looks encouraging, evident from the commencement activity which reached almost 33,000 units in 2023. Increasing supply should also help average property price inflation ease during the year.”
Ends/
Data Series:
Mortgage drawdown data from Q1 2005 onwards is available in Microsoft Excel XLS format in the BPFI Mortgage Drawdowns report data series. Download the BPFI Mortgage Drawdowns Report time series here.
All mortgage approvals data from January 2011 onwards is available in Microsoft Excel format (*.xls) in the BPFI Mortgage Approvals report data series. The BPFI Mortgage Approvals report data series is available to download here.
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Fiona Murphy, Head of Communications, 087 9740046, fiona.murphy@bpfi.ie or Jillian Heffernan, Director of Communications, 087 9016880, jillian.heffernan@bpfi.ie.
