Housing market prospects sees demand for mortgages increase

Demand for mortgages increased for the sixth quarter in a row on the back of more favourable housing market prospects, according to a euro area banking survey conducted by the Central Bank, reports todays Irish Examiner.

“Credit standards in respect of consumer credit and other lending remained unchanged during the third quarter of 2013 after easing somewhat during the previous three quarters. All factors impacting credit standards and all loan terms and conditions in respect of consumer lending were unchanged.

“Loan demand from households for house purchases increased during the third quarter of 2013 – the sixth successive increase. The increase in mortgage demand was linked to more favourable housing market prospects, household savings, and higher levels of consumer confidence,” the Central Bank said.

“Loan demand from households in respect of consumer credit and other lending also increased during the third quarter of 2013.
“Household savings and spending on durable goods were cited as providing an impulse towards increased demand for consumer credit. During the fourth quarter of 2013, credit standards are expected to tighten somewhat with respect to lending for house purchases but remain unchanged with respect to consumer credit and other lending.” The findings were part of a eurozone wide survey into credit conditions across the region for both businesses and consumers. Ireland is a one of a number of periphery euro area countries that has experienced a severe contraction in credit since the start of the financial market crisis in 2008.

The survey also found that the overall demand by businesses for loans was unchanged compared with the last quarter, although the demand for long term loans increased while the demand for short term loans decreased.

In signs that conditions across the banking sector are improving, the survey found that banks’ funding conditions are easing. Source: The Irish Examiner.