The typical, or median, income of first-time buyers of new properties in Ireland is now over €90,000, according to a report by the Banking and Payments Federation Ireland (BPFI).
The banking lobby group’s latest review of the Irish mortgage market indicated that the “median basic household income” of first-time buyers of existing properties in the second half of last year was €74,000 per annum. This rose to €91,000 for first-time buyers of new homes and to €109,000 for mover purchasers.
The median income of first-time buyers of new homes in Dublin was €103,000.
Borrower profile
With the average full-time salary for an individual in the State put at just under €50,000, the figures highlight the affordability gap at the heart of the property market here.
Housing in Ireland is among the most expensive and most affordable in the EU. How does that happen?
Minister concedes in High Court challenge to order facilitating asylum-seeker housing in Athlone
EU needs to step up financing to support collective security and accelerate productivity and growth
Banking lobby group warns that house building has stalled
The BPFI’s report looked at the profile of borrowers, their loans and property types and how this has changed since before the pandemic.
It found the median value of properties purchased by first-time buyers excluding so-called self-builds rose by €35,000 to €320,000 between 2020 and 2022. At the same time, the typical mortgage drawn down by a first-time buyer increased by only €24,000 to €254,000.
This was indicative of “a more prudential approach by borrowers” and reflected increased savings during the pandemic, the banking group said.
Norman Crowley on the business of decarbonisation
The median value of properties bought by mover purchasers last year was €445,000, up from €367,000 in 2020 while the median value of loans taken out by this category of buyer was €395,000. Mover purchasers tend to purchase more expensive homes and have larger loans, the BPFI said.
Median monthly mortgage repayments nationally stood at €1,089 for first-time buyers (excluding self-builds) and €1,406 for mover purchasers.
The report noted that first-time buyers continued to dominate the mortgage market, accounting for 14,018 of 30,739 mortgage drawdowns in the second half of 2022, the highest semi-annual volume since 2007.
Overall, the Irish mortgage market continued to grow strongly in the second half of last year with drawdown volumes up by 24 per cent to 30,739, the most since 2008.
However, the BPFI said the increase was mainly driven by a 153 per cent jump in switching “as mortgage customers responded to the European Central Bank’s interest rate increases from July 2022″.
Drawdown values
First-time buyers continued to dominate, accounting for just under half the drawdowns.
From a regional perspective, Dublin had by far the largest share of first-time buyers purchasing existing properties, at just over a third, and total mover (35.3 per cent) activity in 2022. However, Dublin’s share of first-time buyer new homes mortgages was relatively low at 20.6 per cent.
“There has been a sharp rise in residential property prices from the middle of 2021, resulting in the continued increase in mortgage drawdown values we’ve seen in recent months,” said BPFI chief executive Brian Hayes.
“Property prices continue to increase year on year, albeit at a slower rate, and it remains a difficult environment for many buyers. However, the latest Mortgage Market Profile Report indicates that borrowers are being prudent and bringing more equity to purchases, likely in order to minimise borrowing costs,” he said.
