Irish households continuing to pay down debt and save money

Irish households continuing to pay down debt and save money

Irish households continued to pay down debt and save money in July, according to figures from the Central Bank.

The figures indicate that loan repayments exceeded drawdowns by €346 million in the month.

It was largely driven by declines in loans for house purchase.

Total loans to households were down by nearly 3% in the year to July.

Loans for house purchase, which accounted for 83% of total loans, were down by 2.6%.

In the year to July, repayments on home loans exceeded drawdowns by €2.1 billion.

Household deposits increased by €673 million in July, despite interest rates being at all time lows.

For the 12 months to the end of July, household deposits increased by €2.1 billion.

“The most recent data from the Banking & Payments Federation Ireland showed that mortgage approvals are on the rise but the stricter lending rules from the Central Bank as regards house purchases will likely have a negative impact on borrowing,” Alan McQuaid, chief economist with Merrion said.

“And even with a strong pick-up in economic activity, overall bank lending is forecast to remain fairly subdued in 2015, and still well below what Ireland needs for sustainable growth in the long-run,” he concluded.

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