DAVY VIEW

October’s €1.25bn of mortgage approvals are a fresh cycle high, up 23% on 2019, catching up following COVID-19 disruption. The average approval was up 5% to €250,000, evident of inflationary pressure in the housing market. The stock of homes listed for sale is at historic lows, with homebuilding delayed by the March/April lockdown. Hence, our forecasts for house price inflation and mortgage lending now look too pessimistic — the latter likely to equal close to €8bn in 2020 due to the rebound in transactions.