A housing development in County Longford sits unfinishedPhotocall Ireland

Mortgage lending in Ireland fell by 50 percent last year, which was attributed to the harsh economic situation in Ireland and Europe.

A total of 46,000 mortgages were issued in 2009, at a cost of over $11 billion.

According to the Irish Banking Federation mortgage market profile, the total mortgage book in Ireland stands at $202 billion.

Drawn down mortgages fell by 60 per cent in 2009. The number of residential investments and remortgages also fell last year, and 70 per cent of all mortgage credit went solely to home purchasers.

First time homebuyers make up the largest part of the mortgage market at 35per cent.

The value of mortgages in Ireland has fallen to 2005 levels, but the value of mortgages sought by buyers does not reflect current house prices.

 “Rather than decreasing the size of their loan as you’d expect with house prices falling, they’re probably going that extra mile looking for better located, better positioned properties and they’re prepared to go the extra mile to get the bigger house in the better location," said IBF chief executive Pat Farrell.

“The consensus now, if you pull together all the different forecasts, would be that house prices have dropped by close to 50 per cent, so I think that people are beginning to come back into the market again,” he added.

“Certainly the house purchaser market segment is taking up as much of the action as it can at the moment, so I think that’s a sign that maybe things are beginning to reach the bottom.”

Farrell ruled out a return to the property bubble.

 “Even if it does pick up, it will be very modest because the market . . . isn’t going to grow at anything like the size it was in previous years in the foreseeable future.”