We did it! First-time buyers on how they bought their homes

It’s not easy to buy a home these days. Property prices continue to soar and are currently rising at an annual rate of about 14 per cent. It means that the average first-time buyer (FTB) will pay about €300,000 for their first home – and more in Dublin, where average house prices now reach about €500,000.

Combined with the tight lending rules, the average first-time buyer will need to have income of almost €80,000 to qualify for a mortgage for the average home and, again, considerably more in Dublin. And that’s if they can find one, given historically low supply levels.

Not only that, but FTBs must also contend with high rents which make it difficult to save enough for a deposit.

Nonetheless, despite the challenges, it is possible to get there; it just might take a bit of forward planning, making sacrifices and some ingenuity, as these FTBs tell us.

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A 15-point checklist was where couple Keyur Ratanghayra and Sonia Kaushal started their home-buying search; however, this had to be whittled down in order to achieve success.

'Affording a house in Dublin – it's just so difficult. Why would you pay €450,000 for a house, how could you justify it?'

The couple, both 32, arrived in Dublin in September 2020 from Bangalore, India, and started renting in Rathmines, south Dublin, but quickly started looking to buy their own home.

“Half of my salary was going into rent, that was the motivation to be honest,” recalls Keyur.

The search started in earnest after Keyur attended a mortgage session organised by his employer, Amazon, where he learned that the mortgage on a home would likely be cheaper than the rent – another motivating factor.

The couple drew up a checklist, with 10-15 points covering what they hoped to find in their new home – including “close to the city centre, with space in the house for our parents to visit, in south Dublin” among others. However, they found prices in their target area “really high” and were having little success.

“Every time we went out we were getting out-bid,” says Sonia, adding that at the time, they were going back and forth to their checklist. Keyur recalls not feeling “comfortable” with bidding too high on a property.

“The house market, in particular in south Dublin, has gone crazy,” he says.

Feeling “bitten by these bidding wars”, the couple felt the need for more expert advice, and sought out the services of property coach Breffnie O’Kelly, who talked them through the process.

'We're paying less on our mortgage than if we were renting, only in Ireland would you celebrate putting yourselves into debt for 30 years'

One of the first things to go was the 15-point checklist, and some of their requirements.

“After talking with Breffnie we trimmed down our list,” says Keyur, adding that “space – we had to compromise on that”, as well as the big garden, were some of the preferences the couple had to give up on.

In its place, each had one must-have to guide their property search – Keyur wanted an apartment with a nice view, while Sonia wanted to be near to the Luas Green Line. The couple also wanted a home that could give them flexibility to rent it out or sell should they decide to move from Ireland in time.

Their new approach paid off when the couple went sale agreed on an apartment in Stillorgan, south Dublin, in mint condition, just seven days after first viewing it.

They weren’t the highest bidders, but the couple were able to demonstrate how serious they were as buyers. Chance also played a part.

“I would say there is some luck,” laughs Sonia.

In the end, the price they went sale agreed on wasn’t the price they ultimately ended up paying for the home; a valuation as part of the sales process gave a lower figure than they had agreed to pay.

As a result, they sat down with the agent “and came to the middle point”. It’s something Keyur wishes he had known before.

'We had to make sacrifices; we didn't go on holidays, we didn't have a lot of luxuries, we put our head down and worked'

“When we were bidding for this property, we didn’t know that if the valuation is lower than the sale agreed price, you can negotiate the sale price of the property with the agent which usually works in your favour. I wish I would have known this before bidding,” he says.

Overall, the couple found the sales process straight forward in Ireland.

“Apart from the price, the process is very smooth here than in India,” says Keyur, although he does query the preponderance of the build-to-rent sector in Dublin.

“I don’t know why they build properties in Ireland only for rent, that’s crazy.”

They may be younger than your typical first-time buyer, but their journey to their own home was not straightforward.

Indeed, Karl Dawson, 33, and Michael Gibney, 29, have had an eventful few years in the housing market. Both full-time employees, Karl also works in broadcasting, hosting 98fm's Weekend Breakfast show.

First came a log cabin in the garden of Michael’s family home, which allowed them to save for their wedding.

“It was better than paying rent to a landlord for a couple of years,” says Karl, but adds that it couldn’t be a long-term option.

“It’s just not made for Irish weather,” he laughs.

Then they went back renting, but had to move when their landlord told them that she was going to be evicted from her place, and needed to move back to where they had been living.

So they moved back with Michael’s family, and started to get serious about buying their own home about two years ago.

“Affording a house in Dublin – it’s just so difficult,” says Karl. “Why would you pay €450,000 for a house, how could you justify it?”

Indeed at times it seemed like they might never get their home, he recalls.

“We stopped looking in August of last year, because everything was getting bad again with Covid.”

Karl’s family are in Santry and Michael’s in Lucan, but the couple were willing to cast their search farther afield. They kept an open eye on either a new home or older one, but in the end plumped for a home that was built in 2008. The house, in Athy, Co Kildare, was a three-bed semi-d, which was being sold via a private sale.

“It had 10,000 views on Daft, and we went to see it and we didn’t think we’d get it,” he recalls.

'The difference between a house and a home, is that a home is about memories and all of those things'

Being able to avoid the worst of a Dublin bidding war was a plus, and the couple managed to go sale agreed on the home, with the sale brokered through their respective solicitors.

It may be a bit farther than they had initially hoped, but the commute is working out fine, “we’re literally only 45 minutes up the road”, says Karl.

The couple completed the sale in December and made the move in January. Now they’re getting used to their new abode.

“We took our time and we got there. There were times we didn’t think we’d get there, but with the help of our family, and being able to move in and be able to save, we did,” he says.

“We’re paying less on our mortgage than if we were renting,” he adds, laughing, “only in Ireland would you celebrate putting yourselves into debt for 30 years”.

His advice for would-be buyers? Start saving.

“If I could go back in time 10 years’ time, I’d start saving and start putting money away. Even if it’s only €50/€100 a week, start saving. It’s only in the last two years that we really started to put money away,” he says, adding that buying a house is only one expense.

“You pay your deposit, but then you forget that there’s stamp duty, solicitor fees, surveyor fees.”

Buying a home was not an overnight decision for personal trainers Jane Kerr (33) and Colm Ward (35); it was the culmination of a five-year plan that had seen them successfully launch their own business, and subsequently buy their first home.

The couple, who live in Drogheda, Co Louth, had been renting a home in the town together since 2016. Both from Co Monaghan, they got married in 2019, and were hoping to start a family and wanted a place of their own – a home, rather than a house.

“The difference between a house and a home, is that a home is about memories and all of those things,” says Colm.

They started the process in April 2020, at the height of the pandemic, and were initially concerned that as a self-employed couple, both working in the same business, it might be a challenge to secure a mortgage.

“That would have been our perception, that we wouldn’t have a hope getting it being self-employed,” recalls Colm.

Having started their business, the health and wellness focused Me Time Functional Training (metimetraining.ie) in 2017, they didn't have too many years of accounts to show lenders, while they were also in the midst of a pandemic, during which they had to transition into delivering online training.

An early visit with mortgage broker Mark Murphy of Affinity Advisors, however, offered ground for optimism.

“He reassured us that we can make this work,” says Colm, adding that they left with a list of documents they needed to prepare, and through their accountant and Mark, they secured their mortgage approval within six months.

The couple had their eye on a new home, and the Help to Buy scheme. However, given they had spent two and a half years abroad prior to setting up the business, and were in start-up mode in the early years, they could only access about 60-70 per cent of their deposit through Help to Buy.

This is because the rebate is based on how much tax you’ve paid in the four years previous to applying; something people can often forget, and something that can make it more difficult for those who’ve lived abroad to qualify for.

By February 2021, the couple had picked out a new home off the plans and paid their booking deposit for a three-bed semi-d close to the M1 for visits home to Monaghan, and with the potential of converting the attic down the road.

They were due to move in to their new home in July 2021, but fortuitously perhaps, as the couple also welcomed baby Darragh that month, the move-in date was delayed until November due to Covid.

“Our experience overall was very positive, even with the builders,” says Colm.

For Jane, key to their success was the time and effort they had put into their finances as part of their five-year plan.

The average first-time buyer is now aged 35 and purchases a property valued at €302,092

“We had to make sacrifices; we didn’t go on holidays, we didn’t have a lot of luxuries, we put our head down and worked,” she says, adding, “it doesn’t just happen overnight. It does take time and sacrifice. But it’s worth it now.”

Looking back, the couple wonder whether they should have gone for it sooner.

“If we’d bought six months earlier the house could have been €12,000 cheaper,” says Colm, but adds, “I do believe now it would be nearly €30,000 dearer”.

Today’s (average) first-time buyer

Property value €302,092
Loan size €240,468
Loan-to-value 80.8%
Income €78,132
Loan term 29 years
Size of home 1,432sq ft
Age 35
% of single buyers 33
% of joint buyers 67

Source: Central Bank