Mortgage borrowing approached record levels in April as overall consumer demand for credit surged again, new figures have shown.
The Central Bank said yesterday that more than €1.6 billion had been lent to residential property buyers over the course of April, the second-highest monthly amount on record.
The rise came after what the bank called "similarly robust growth" in March, underlining the strength of the housing market.
Mortgage lending had shown signs of easing early in the year but annual increases have now steadied at high levels.
Underlying growth in residential mortgage credit was unchanged at 25.8 per cent in April, according to the Bank's latest private-sector credit numbers.
When other types of lending to businesses and consumers are included, annual growth picked up in April, climbing from 25.4 in March to 26.7 per cent.
The Bank said the "nominal" increase in overall credit was relatively low at €1.8 billion, but pointed out that this figure was depressed by a large fall in lending to IFSC companies caused by maturing term loans.
Stripping these loans out, the total borrowed by the private sector in April exceeded €3 billion, according to the bank's analysis.
With mortgages driving slightly more than half of this, the remaining growth came from items such as repurchase agreements and term loans.
This non-mortgage credit rose by 25.3 per cent year-on-year, up from an annual increase of 23.1 per cent in March.
Alan McQuaid, chief economist with Bloxham Stockbrokers, said yesterday that private-sector credit continued to run at "extremely high levels", and showed little sign of an imminent easing of demand.
The Republic's appetite for private-sector borrowing is currently running at three times the average euro-zone level, he noted.
"The main driver of credit growth is low interest rates, a trend that is unlikely to change any time soon," said Mr McQuaid.
He believes that interest rates will only increase by one quarter of a percentage point "at the very worst" this year, thus providing little to dampen demand for credit.
A breakdown of the Central Bank numbers shows that overdrafts were the only area where demand for credit declined in April, with total lending in this category falling by €178 million over the month.
