The latest report by the Banking and Federation Ireland shows a direct relationship between consumer spending and mortgage approvals.
Impact of lockdown restrictions
In May of last year, the housing market experienced an upward trend shown by a rise in mortgage approvals. This was before the onset of the pandemic. However, when Covid-19 restrictions were being implemented this year, consumer spending fell and so did the demand for houses.
The number of mortgage approvals
Although banks approved nearly 1900 house loans in June, there was a fall of mortgage approvals by 14% compared to last year in May. Also, between April and May of this year, the housing market shrank by 16% because of the pandemic.
A resilient housing market
Comparatively, consumer expenditure on houses was less in June than in May last year. But, what is noticeable is that Banks approved mortgages worth millions of euros (hyperlinked) during the COVID-19 crisis. This provided a lifeline to banks and indicates that the housing market may be weathering the storms of the coronavirus. Read here for the latest news about the impact of consumer income on mortgage approvals.