Figures from the Central Bank show that residential mortgage lending recovered a little in December from historic lows seen the previous two months.
Mortgages increased by €281m in December, leaving the average monthly increase for the year of just €676m.
The amount of money lent for mortgages rose by just €26m during October, compared with the average monthly increase of almost €2 billion at the height of the housing boom in 2006. Mortgage lending had increased by €96m in November.
The annual rate of growth in December still fell to 5.8%, the lowest figure since 1986 says the Central Bank. It had stood at 6.7% in November.
The Bank says that general economic conditions have reduced confidence and dampened demand for mortgages. 'There may also be an incentive to delay house purchases due to falling house prices,' it added.
The increase in residential mortgages during 2008 as a whole came to €8.1 billion, exactly half that recorded in 2007.
Today's figures also show that overall private sector credit growth slowed to an annual rate of 6.6% last month from 8.4% in November, which resulted in a fall in lending of €9 billion to €392.8 billion.
However, the Central Bank says a large portion of this was accounted for by a fall of over €4 billion in lending to non-bank IFSC companies.
The level is down from a peak of 30.3% hit in the middle of 2006 when the Central Bank warned that the booming property market was fuelling unsustainably high lending growth.
The Central Bank also says that the annual rate of increase in debt on credit cards fell to 4.6% last month. New spending on credit cards rose by €240m on the month, while payments received were up €151m. However, credit card users spent less on their cards last month than the same time in 2007.
