DUBLIN, Dec 1 (Reuters) - Irish banks approved more mortgage credit in October than in any month for at least a decade, data showed on Tuesday, as a rapid rebound in demand among housebuyers from COVID-19 disruption looked set to increase property prices.
Lenders approved 1.25 billion euros ($1.5 billion) worth of mortgages, a 23% year-on-year rise that curbed the decline in approvals so far this year to 14% in value terms after their collapse during a full lockdown of the economy.
Driven by a 31% rise in approvals for first-time buyers, the amount sanctioned was the highest monthly total since the Banking and Payments Federation Ireland began to publish the data in 2011.
Lenders in Britain also approved the most mortgages in more than 13 years in October, data showed on Monday.
A record surge in savings as a result of the pandemic disruption to economic activity, and the expansion of a government subsidy for first-time buyers of newly built homes, was helping to boost Irish approvals, said Dermot O'Leary, chief economist at Goodbody Stockbrokers.
Conall MacCoille, chief economist at Davy stockbrokers, said the average approval amount per borrower rose by 5% year-on-year to 250,000 euros in October, evidence that inflationary pressure was beginning to build again in the housing market.
Average house prices have fallen slightly since the pandemic began but the disruption has also hit housing supply, which has long struggled to keep up with demand.
The government expects 16,000 to 18,000 housing completions this year, which would represent a fall of at least 15% versus 2019 and amount to half the level the government says is needed each year to catch up with demand.
"With homebuilding delayed, too much money is chasing too few homes," MacCoille wrote in a note.
($1 = 0.8348 euros)
(Reporting by Padraic Halpin; Editing by Pravin Char)