Mortgages in Ireland 2007 (Market Guide)

Fueled by factors such as rising house prices, strong consumer demand and lower cost of borrowing, gross advances in the Irish mortgage market reached EUR25.5 billion in 2006. What are the current issues facing this market? How are housing policies affecting its performance? Who are the biggest lenders? What will be the size of the sector in the next five years? This report provides the answers.



Report Highlights
According to the most recent data, the proportion of owner-occupiers in the Irish property market amounted to 74.5% in 2006, while 20.3% were in private or public renting. While the pace of growth seemed to be decelerating after 2003, average house price growth has stayed in the double digit. Consequently, the risk of a sharp correction in house prices in the future is still present. Driven by strong growth in house prices and consumer demand, mortgage balances outstanding in the Irish residential market rose from EUR43.4 billion at year-end 2002 to EUR110.6 billion at year-end 2006.


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Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Market size 2
Market forecasts 2
Key issues 3
Key market players 4
Contents 5
Figures 6
Tables 7
Market Context 8
Country overview 8
Demographics data on a selection of major western European countries 10
Population 10
Economy 11
Housing market 16
Dwelling stock 16
House prices 19
Government housing intervention 20
Taxes, subsidies and housing schemes 20
The Planning and Development Act (2000) 20
Tax changes affect Irish homebuyers 21
Recent regulation changes may further affect the housing market 21
Market data 21
Mortgage interest rates 21
Market size 22
Balances outstanding 22
Gross advances 25
Product lines 26
Market structure 26
Structure of the Irish banking sector 26
Mortgage market structure 27
Mortgage market share by type of player 27
Funding 28
Distribution 29
Regulatory environment 29
Industry regulators 30
Central Bank and Financial Services Authority of Ireland (CBFSAI) 30
Industry associations 31
Irish Bankers' Federation (IBF) 31
Irish Mortgage Council (IMC) 31
Irish Finance Houses Association (IFHA) 31
Other noteworthy organizations 31
Irish Bank Officials Association (IBOA) 31
Credit bureaus 32
Repossession and rules of law 32
Regulatory issues and developments in the mortgage market 32
The birth of an integrated European mortgage market is still very far off on the horizon 33
Basel II will mean a number of changes for lenders 33
Recent national mortgage-related legislation 33
Key issues in the mortgage market 35
Competitor and Product Overview 36
Top five mortgage lenders 36
Market share by balances outstanding 36
Product analysis 37
Typical product characteristics 37
Market Forecasts 39
Forecasting gross advances 39
Gross advances in the Irish residential mortgage market will reach €39.7 billion in 2011 39
Future prospects 40
Market attractiveness 40
Market inhibitors 41
APPENDIX 42
Supplementary data 42
Tables relating to Chapter 2: Market Context 42
Definitions 44
AAGR 44
Balances outstanding 44
CAGR 44
Capped mortgage 44
Equity release 44
EU 15 44
Fixed rate mortgage 44
Flexible mortgage 44
Gross advances 44
Loan-to-value (LTV) 44
Mortgage intermediary 45
Remortgaging 45
Variable mortgage 45
Forecasting methodology 45
Research methodology 45
Further reading 46
European Mortgages 46
Ask the analyst 46
Datamonitor consulting 47
Disclaimer 47

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Table 1: Forecast of mortgage gross advances in Ireland, 2005-11f, (€m) 2
Table 2: Total population across major western European countries, 2002-06 10
Table 3: GDP at current rates across major western European countries, 2002-06, (€bn) 11
Table 4: GDP per capita at current rates across major western European countries, 2002-06, (€) 12
Table 5: GDP growth rates across major western European countries, 2002-06 (%) 13
Table 6: GDP composition by sector across major western European countries, 2006, (%) 14
Table 7: Inflation across major European countries, 2002-06, (%) 15
Table 8: Unemployment rates across major western European countries, 2002-06, (%) 16
Table 9: Age of Ireland's dwelling stock, 2002 18
Table 10: Residential mortgage balances outstanding compared to GDP of selected European countries, 2006 25
Table 11: Market share of gross residential mortgage advances in Ireland by type of institution, 2000-04, (%) 28
Table 12: Market share by competitor in the Irish residential mortgage market, 2005-06 37
Table 13: Proportion of mortgage loans advanced in the Irish market split by variable and fixed rates, 2002-06, (%) 38
Table 14: Forecast of residential mortgage gross advances in Ireland, 2005-11f, (€m) 40
Table 15: Total dwelling stock in Ireland, 2002-06 42
Table 16: Average house price growth in Ireland split by new and second-hand houses, 2002-06 42
Table 17: Typical mortgage interest rates in the Irish residential market and ECB base rates, Q3 2004-Q4 2006, (%) 42
Table 18: Mortgage balances outstanding in the Irish mortgage market, 2002-06, (€m) 43
Table 19: Net mortgage lending in the Irish residential market, 2002-06, (€m) 43
Table 20: Mortgage gross advances, number of mortgage loans and average mortgage loan amount in the Irish residential market, 2002-06 43


Figure 1: Mortgage gross advances in the Irish residential market reached €25.5 billion in 2006, 2002-06 2
Figure 2: Permanent TSB remained the leader in the Irish mortgage market in 2006, 2005-06 4
Figure 3: A snapshot of Ireland's key statistics, 2006 9
Figure 4: Dwelling stock in the Irish residential mortgage market has been growing steadily, 2002-06 17
Figure 5: Ireland has a high owner-occupation rate, 2006 19
Figure 6: The Irish property market continued to witness strong growth in house prices, 2002-06 20
Figure 7: Typical mortgage rates in Ireland rose by 0.95 percentage points from Q2 2005 to Q3 2006, Q3 2004-Q4 2006 22
Figure 8: Mortgage balances outstanding in the Irish market reached €110.6 billion in 2006, 2002-06 23
Figure 9: Net mortgage lending in Ireland stood at €16.3 billion in 2006, 2002-06 24
Figure 10: Mortgage gross advances in the Irish residential market reached €25.5 billion in 2006, 2002-06 26
Figure 11: There are two types of financial institutions in the Irish banking industry, 2007 27
Figure 12: Regulatory overview of Ireland, 2007 30
Figure 13: Permanent TSB remained the leader in the Irish mortgage market in 2006, 2005-06 36
Figure 14: Gross advances in the Irish residential mortgage market will grow at a CAGR of 9.6 % over the next five years, 2005-11f 39

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