Despite an ongoing resurgence in the property market, mortgage lending fell in 2013, as the number of mortgages issued fell by 5.6 per cent down to 14,985 and the value of mortgages dropped by a similar percentage, down to €2.5 billion.

The decline was evident in the fourth quarter of last year, with the IBF/Pwc Mortgage Market profile pointing to a decline of 13.9 per cent in the number of mortgages given out, and a 10.3 per cent decline in value, when compared with the same quarter in 2012.

Dermot O’Leary, economist with Goodbody Stockbrokers, described the outturn as “underwhelming”, adding that it can be partly explained by the low level of supply of properties and the presence of cash transactions.

“On the latter issue, we estimate that only 46 per cent of transactions were carried out using a mortgage last year, down from 56 per cent in 2012,” he said.

The figures may also be distorted by the effect of people rushing to buy at the end of 2012 in order to take advantage of mortgage interest relief before it was abolished.

First time buyers and mover purchasers, continued to dominate the market in 2013, accounting for almost 90 per cent (87.8%) of new mortgages issued. In effect, over 90 per cent (93%) of all mortgage credit now goes to the home purchasing segments of the market.

The average loan size increased to € 172,118 in the fourth quarter of 2013, up 4.1 per cent on Q4 2012. The average mortgage drawn down for property purchase increased on a year-on-year basis for the first time since Q2 2008, reaching € 179,934.

Goodbody is forecasting growth in the value of mortgages drawn down of 29 per cent to € 3.3 billion this year, with a further expansion to € 4.2 billion in 2015.