Are falling loans for home purchase a canary in the property coal mine?

Banks are relentlessly upbeat about mortgages. Every month, the industry group, Banking and Payments Federation Ireland (BPFI), publishes data on how many mortgages have been sanctioned by Irish lenders and for how much money. The tone is invariably upbeat. And so it is this month, with the BPFI release hailing the €1.5 billion agreed in mortgages in April. The number of mortgages approved was up on last month and last year, as was the amount approved. But behind those headlines this month was an altogether different story. In fact, the number of mortgages for home purchase was actually down across all categories. First-time buyers – the largest share of the market, accounting for more than 60 per cent of all new home loans – fell fractionally compared to the same month last year (2,899 versus 2,909 in April 2025). But loans to existing homeowners looking to move property were 3.5 per cent down on April 2025, while there was a 1.5 per cent decline in buy-to-let mortgages, albeit that is a very small part of the market these days. It’s not earth-shattering. Overall, the number of loans agreed for home purchase was only 1 per cent down on last year. And the continuing advance of property prices means that, by value, the loans that were sanctioned were for €17 million more than the same month last year. But it is one more sign of the squeeze in the market, with rising prices making it more difficult for younger borrowers to even contemplate getting a mortgage in the first place and a dearth of properties (and growing economic uncertainty) deterring existing homeowners from moving. Only relatively strong growth in the remortgaging/switching market (up 6 per cent year on year) and the mortgage top-up sector (up 8.9 per cent) dragged the overall mortgage loan volumes in April ahead of the year-ago figure. Switching and remortgaging now accounts for 12 per cent of all new mortgage money approved, and is rising. As Goodbody economist Dermot O’Leary notes, recent high-profile job losses flagged at Meta and Oracle are a pointer to wider employment trends which, in the tech sector in particular, have slowed. He believes employment trends will be a keen indicator over the coming months of the prospects of the mortgage market. Just one more reason to fear the impact of the AI revolution.