DUBLIN, Jan 30 (Reuters) - Growth in lending to Ireland's private sector dwindled further in December as economic fears and a crumbling property market depressed demand.
Private sector credit growth slowed to an annual rate of 6.6 percent in December from 8.4 percent the previous month -- a fall in lending of 9 billion euros ($11.8 billion) to 392.8 billion euros, Central Bank of Ireland data showed on Friday.
The level is down from a peak of 30.3 percent hit in June 2006 when the central bank warned the booming property market was fuelling unsustainably high lending growth.
Growth in residential mortgage lending fell to 5.8 percent in December -- the lowest annual rate of increase since 1986 -- from 6.7 percent in November,
The bank noted general economic conditions had reduced confidence and dampened demand for mortgages.
"There may also be an incentive to delay house purchases due to falling house prices," it said.
House prices in Ireland have fallen sharply since the peak of the country's decade-long "Celtic Tiger" boom when prices more than quadrupled in some parts of the capital Dublin.
The bank added that tighter lending standards at banks had also made mortgage credit harder to obtain.
The net increase in residential mortgages of 8.1 billion euros over 2008 as a whole was exactly half that recorded in 2007, it said.
Credit institutions in Ireland accounted for 216.8 billion euros of the euro area's broad money supply (M3) in December -- a monthly increase of 6.8 billion or 3.2 percent.
(Reporting by Kevin Smith; Editing by Victoria Main)