Irish property-related lending increased at its lowest rate since 1997 in June, new figures issued by the Central Bank show.
Lending for property now accounts for just half of the increase in credit, down from four-fifths a year ago.
The rate of increase in lending to the construction sector has fallen for seven consecutive quarters and for eight consecutive quarters for the real estate sector.
The Central Bank said that the annual increase in lending for real estate activities reached its lowest rate since 1997 in Q2 2008, at 20.7 per cent. The annual growth rate in lending to construction declined to 4.6 per cent, from 35.6 per cent in Q2 2007.
The growth in mortgage lending in Ireland has fallen to its lowest level in 17 years.
The rate of growth in residential mortgage lending fell to €893m in June, an annual growth rate of 10.2%.
Average monthly rises for the first half of the year was just above €900m. This increase in residential mortgage borrowing in the first half was more than a third lower than in the same period last year.
The Central Bank said mortgage lending levels are back to those in 2003.
Overall lending in the economy in June was the lowest in five years at 14.3%. This was down from 15.1% in May. Private sector credit (PSC) rose by €2.6bn in June. However, the Central Bank says that one component of PSC that complicates time comparisons, is the rise in the holdings by Irish credit institutions of asset-backed securities issued by SPVs. The value of credit in this form rose from €6.8 billion in Q2 2007 to €20.6 billion in Q2 2008. Similarly, on the issuance side, residential mortgage-backed securitisations issued by Irish credit institutions became increasingly popular since mid-2006 with the outstanding value of securitised residential mortgages increasing by €18.3 billion since then. These developments reflect the strategies and preferences of Irish credit institutions, the Bank says.
The figures also show a slowing rate of growth in credit-card spending, with overall private-sector credit at its lowest level since 2003.
The annual rate of increase in debts owed on credit cards fell in June to 11.4% from almost 12% in May.
Both new spending and payments received fell, which meant that money owned on credit cards increased by only €10m, the Central Bank said. This took the total outstanding indebtedness on credit cards to €3bn.