A record €1.3billion worth of mortgages were approved last month.

More than 5,000 loans approved are worth an average of almost €255,000 each, which, under the Central Bank’s mortgage rules, means the average borrower with a 20% deposit can buy a home worth almost €319,000. The amount is around €11,000 above the current average house price of €308,000 – suggesting that prices are under severe upward pressure.

More than half the loans were approved for first-time buyers. The number of loans approved was up by almost half on a year ago, and 53,511 mortgages, worth €13.2billion, were approved in the year to the end of July.

Housing campaigner David Hall, of the Irish Mortgage Holders Organisation, warned: ‘We’re back! The mortgage bubble is back and prices are back, the frenzy’s on. Stock levels are low, we’re down to a third of the stock that was available.

It’s the same old problem, they can’t build and it’s very difficult for everyone.

It’s going to mean higher prices, and people will be bidding against each other. One of the new features is people are selling houses before they even find somewhere to buy.’

He also said that having somewhere you need to sell is ‘now a massive impediment’, adding: ‘If you’re in a house today and I’m bidding against you and you’re trying to sell and I have no house to sell, you’ve got no chance with me bidding in the market.

Source Extra.ie