Household loan drawdowns exceed repayments in September

Household loan drawdowns exceed repayments in September

 

New Central Bank figures show that new household loan drawdowns exceeded repayments in September for just the third time since the end of 2009.

The Central Bank said the €37m increase was due to a rise in net consumer credit drawdowns of €87m.

However, lending to Irish households continued to fall on an annual basis. Lending fell by 4.2% on an annual basis in September after a 4.3% decline in August.

The Central Bank said the continued fall is due to less demand for home loans, which fell at an annual rate of 2.4% last month. Lending for consumption and other purposes also eased by 9.8% over the month.

Today’s figures also show that deposits from the Irish private sector rose at an annual rate of 8.6% in September after a rise of 7.8% in August.

But household deposits – which account for 51% of private sector deposits – fell by 0.9%, the Central Bank noted.

Commenting on the figures, Merrion economist Alan McQuaid said that they show that there is still little real progress being made in terms of advancing loans to households.

“As a result, this will severely hamper the overall recovery prospects for the housing market and the Irish economy as a whole, and keep the unemployment rate higher than it would otherwise be. Unless this situation is addressed, the economy will continue to grow well below potential for the foreseeable future,” he cautioned.

 

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