Growth in lending to Ireland's private sector dwindled further in December as economic fears and a crumbling property market depressed demand.
Private sector credit growth slowed to an annual rate of 6.6 per cent in December from 8.4 per cent the previous month - a fall in lending of €9 billion ($11.8 billion) to €392.8 billion, Central Bank data showed today.
The level is down from a peak of 30.3 per cent hit in June 2006 when the central bank warned the booming property market was fuelling unsustainably high lending growth.
Growth in residential mortgage lending fell to 5.8 per cent in December - the lowest annual rate of increase since 1986 - from 6.7 per cent in November.
The bank noted general economic conditions had reduced confidence and dampened demand for mortgages.
"There may also be an incentive to delay house purchases due to falling house prices," it said.
House prices in Ireland have fallen sharply since the peak of the country's decade-long property boom when prices more than quadrupled in some parts of the capital Dublin.
The bank added that tighter lending standards at banks had also made mortgage credit harder to obtain.
The net increase in residential mortgages of €8.1 billion over 2008 as a whole was exactly half that recorded in 2007, it said.
Credit institutions in Ireland accounted for €216.8 billion of the euro area's broad money supply (M3) in December - a monthly increase of €6.8 billion or 3.2 per cent.
Reuters