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Start of 2023 ushers in mortgage slowdown as drawdowns slide by a third

10,908 new mortgages to the value of €2,868 million were drawn down by borrowers during the first quarter of 2023.

THE NUMBER OF mortgages drawn down in the first three months of this year has decreased by over 30% when compared with the last three months of 2022, according to two reports published today by the Banking and Payments Federation Ireland (BPFI).

A total of 10,908 new mortgages to the value of €2,868 million were drawn down by borrowers during the first quarter of 2023. 

This represents an increase of 10.1% in volume and 14.1% in value on the corresponding first quarter of 2022. 

However, a comparison with the previous quarter, the last three months of 2022, shows a decrease of 31.3% in volume and 34.1% in value. 

First-time buyers (FTBs) remained the single largest segment by volume (50.8%) and by value (51.1%). 

Re-mortgage/switching volumes and values rose by 22.5% and 25.3% year-on-year respectively, but fell by 52.1% and 53.7% on the previous quarter. 

A total of 4,520 mortgages were approved in March 2023 – some 2,801 were for FTBs (62% of total volume), while mover purchasers accounted for 1,019 (22.5%).

The number of mortgages approved in March rose by 33.8% month-on-month and fell by 1.2% year-on-year.

Mortgages approved in March 2023 were valued at €1,301 million – of which FTBs accounted for €819 million (62.9%) and €332 million by mover purchasers (25.5%).

The value of mortgage approvals rose by 37.7% month-on-month and 7.7% year-on-year.

Re-mortgage/switching activity fell by 54.4% year on year in volume terms and by 53.1% in value in the same period.

“Our latest mortgage figures show that in terms of mortgage drawdowns, demand remains strong with 10,908 new mortgages to the value of €2.9 billion drawn down by borrowers during the first quarter of 2023,” BPFI chief executive Brian Hayes said. 

“However overall, the figures point to a continued year on year slowdown as the impetus from switching decreases. Mortgage approval volumes in March fell by 1.2% year on year while switching volumes dropped by 54.4%,” Hayes said. 

“It is notable nonetheless, that trends in the home buyer segments remain positive. First-time buyer and mover purchase drawdown volumes reached their highest Q1 levels since 2007 and 2008, respectively,” he added.

“Looking forward, FTB approval volumes rose by 15.7% year on year with FTBs accounting for 62% of approval volumes, the highest share since data became available in July 2014.”

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