Mortgage lending growth for residential properties, in Ireland, has hit a 16 year low.

The statistics, compiled by the Central Bank, for May, show the annual rate of credit growth fell 0.8 points from April (15.9%) to May (15.1%), the lowest rate of growth since late 2003.

Mortgage lending during May increased by €1.3 billion, the most substantial rise for 2008. However, the rate of growth still dropped to 11.1%.

Non-mortgage credit growth also fell by 1.1 point, making the annual rate 18.2%.

-- Advertisement --

Irish credit card debt rose by around 5%, from April (7.2%) to May (11.9%). The Central Bank attributed this to maturing SSIA account, which demanded larger repayments by debtors in May 2007. This had created a drop in outstanding debt on cards.

A leading stockbroker analyst has predicted the amount of bad debt will rise during the second half of 2008.

Goodbody's Eamonn Hughes also said: "Given that the credit crunch really stepped up a gear this year, we are not so convinced that next year is the peak and in fact the credit charge will continue to rise through 2010 and 2011."

Year on year, capital investments for the first quarter of 2008 has plummeted by around 18.6%, with many suggesting the decline in building works being the largest contributing factor.

(PR/JM)