The state agency that was established with the aim of funding the delivery of new homes reported an increase in total loan approvals to just shy of €1.25 billion by the end of 2022.

That amounted to growth of almost 50% on the €835m approved at the end of 2021.

In its year-end performance update published today, Home Building Finance Ireland (HBFI) said that by the end of last year it had approved funding for 5,717 new homes in 99 developments in 21 counties.

25% of the new homes approved for funding are for social housing.

1,245 units have been completed and sold, with a further 1,819 contracted for sale or sale agreed at the end of December.

HBFI was established in 2018 and started operations in early 2019.

Initial funding capacity of €730m made available by the Ireland Strategic Investment Fund (ISIF) is continuously recycled as early loans are repaid, freeing up capacity for new lending.

The group also has the capacity to raise additional capital through market-based borrowing if required.

Of the €1.248 billion approved, total drawdowns have exceeded €900m for 60 developments totalling 4,132 units where construction is in progress or has completed.

HBFI typically expects a time lag of between three and six months between a loan being approved and its first drawdown.

Although it funds the development of units ranging from one-bed apartments to five-bedroom houses, 70% of the homes funded are 3-bed or 2-bed units aimed at first-time buyers.

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"We're continuing to make a difference for owner-occupiers, renters and people who need social and affordable housing by adding much-needed new supply to all of these sectors," Dara Deering, CEO of Home Building Finance Ireland said.

"We're lending to large and small housebuilding firms, extending our reach to improve supply as much as we can," she added.

Individual loan facilities range from €1m to €94m, with an average size of €13m.

Terms of these facilities range from six months to 48 months, with an average of 22 months.

Ms Deering said the first half of 2022 was the busiest-ever six-month period in terms of loan approvals but it was followed by a lower level of applications and new approvals in the second half, reflecting a slowdown in construction activity across the market.

"Inflation has been a real challenge. It's at unprecedented levels. Approval levels in the second half of 2022 eased slightly reflecting a broader slowdown in construction activity, but ultimately we have a housing shortage so there is strong demand for homes," she told Morning Ireland.

"Developers still have strong demand for funding. The most important thing we want to provide is certainty and confidence," Dara Deering added.

She said the rates HBFI charge are between 5% and 8% above three month EURIBOR (the interest rate at which European banks lend to each other).

"They're competitively priced in the market place but really it's about providing housebuilders with certainty in the current environment that if they have schemes and they're ready to start construction, we have adequate finance available to them and that that won't be an impediment in terms of bringing forward new supply," Ms Deering concluded.