DUBLIN (Reuters) - Mortgage approvals by Irish banks fell 9.9% year-on-year in March with the first major effects of the coronavirus set to become apparent in April's data, the Banking and Payments Federation Ireland (BPFI) said on Wednesday.
Ireland's mortgage market recovered from a banking and economic crisis a decade ago to reach the highest level since 2009 last year when 9.5 billion euros ($10.30 billion) of debt was drawn down for house purchases.
While 8,728 new mortgages to the value of almost 2 billion euros were drawn down in the first quarter of 2020, up 1.8% year-on-year in volume terms and 6% in value, approvals began to drop in March in line with the gradual shutdown of the economy.
Ireland introduced stay-home measures almost six weeks ago to slow the spread of the novel coronavirus, shutting down all but essential operations and will only begin to slowly unwind them from May 18.
The resulting hit to income and jobs has led banks to extend three-month loan repayment breaks to over 65,000 mortgage customers and over 22,000 businesses.
"We expect to see the first effects of COVID-19 on the mortgage market coming through in April's mortgage approvals figures," BPFI Chief Executive Brian Hayes said in a statement.
"As we navigate our way through these unprecedented times it will be necessary for both lenders and borrowers to take a realistic and pragmatic approach until such time as we have more clarity on the wider impact of the pandemic as a whole."
Allied Irish Banks (I:AIBG) Chief Executive told Reuters last week that the collapse in housing transactions would have a material impact on mortgage volumes in 2020 but that the long-standing shortage of housing supply will remain broadly supportive of activity once normality resumes.
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