The housing market continued to fuel dramatic expansion in private-sector lending in June, according to new figures from the Central Bank.

The credit numbers show that residential mortgage lending saw annual growth of 23.9 per cent over the month, up from 23.6 per cent in May.

The continued strength in mortgage lending is likely to give the Central Bank renewed cause for concern, particularly since it comes against a persistently sluggish economic backdrop.

The Republic's banks and building societies recorded an increase of almost €900 million in lending business over the course of June.

Most of the growth was driven by domestic activity, with companies based in the International Financial Services Centre (IFSC) accounting for less than €200 million of the rise.

The jump translated into annual growth of 13.5 per cent in private-sector credit. This represents a slowdown on May, when annual expansion of 15.5 per cent was recorded.

The Bank said some of the declline was attributable to a €750 million mortgage securitisation by First Active.

When mortgages are excluded from the overall numbers, private-sector credit growth fell from 10.4 per cent in May to 8.2 per cent in June. In total, Irish borrowers owed €147.9 billion to banks and building societies at the end of June.

Growth came across most loan categories, with term loans increasing by €842 million and residential mortgages increasing by €385 million.

The Central Bank said, however, that the underlying increase in mortgages was about €1.1 billion when First Active's securitisation was included in the numbers.

Overdraft borrowing was broadly stable, while repurchase agreements saw a decline of €184 million.