The latest borrowing figures from the Central Bank provide further evidence of belt-tightening across the economy.
Activity in the household mortgage market was revealed to be at its lowest since the start of 2003, while the annual rate of increase was at its lowest in 14 years.
In response to the figures, Fine Gael Deputy Leader & Finance Spokesman Richard Bruton said that it was "Brian Cowen's shambolic handling of the economy" that has left the financial sector, households and first time buyers exposed to the global economic crisis.
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According to Deputy Bruton, Ireland has been left with a financial system more exposed to property speculators than any other major economy, with just under two-thirds of total outstanding bank debt (about €225 billion) now property-related.
Lending to builders and developers alone (excluding mortgages), he claims, now stands at well over €100 billion - or 30% of total bank lending; and level of household indebtedness that will act as a drag on the economy for years to come.
"At 91% of GNP, personal indebtedness in Ireland is now higher than any other eurozone country and is almost twice the eurozone average," he said.
He claims that up to 70,000 First Time Buyers who took out mortgages since the beginning of 2006 now facing the dreadful prospect of negative equity in 2008.
He added: "Minister Cowen should explain why he spent much of 2006 and 2007 publicly insisting that the debt-fuelled property boom was based on 'sound economic fundamentals', in direct contradiction with advice from the International Monetary Fund (IMF) and other experts."
(VB/JM)
