Bank of Ireland has released figures showing a major increase in the value of mortgage lending to homeowners planning to trade up.
In the 12 months to June 2003, the amount borrowed by trading-up buyers was in excess of €400 million, representing an increase of over 200 per cent in the past five years.
This figures, from Bank of Ireland Mortgages, back up the theory that a "trading-up phenomenon" is taking place in the Irish property market. This trend reflects the fact that first-time buyers who could not afford to buy their preferred house over the past 10 years opted for a "compromise" home until they could afford to upgrade or move into the area of their choice.
Trading-up loans account for 20 per cent of lending activity by Bank of Ireland Mortgages, with an average loan of €261,000 in Dublin and €123,000 outside the capital.
Taking in to account an average loan-to-value ratio of 60 per cent, the figures suggests that in excess of €400,000 is the average price homeowners are paying for their second or subsequent homes in the Dublin area.
By contrast, the average price people outside Dublin are paying for their trade-up home is €205,000.
An independent nationwide survey conducted by Behaviour & Attitudes on behalf of Bank of Ireland's mortgage division revealed that of all current homeowners, 25 per cent have moved one or more times over their lifetime.
The research shows that the average time a person will stay in their first home these days is significantly shorter than they would have done previously.
Of those who traded up, respondents aged over 50 indicated they spent at least 10 years in their first home, whereas the survey shows that respondents under 50 are spending a shorter time in their first home (an average of six years).
The survey also shows that 46 per cent of respondents said that house prices were the key barrier to trading up, 22 per cent cited stamp duty and 11 per cent felt supply or availability of their preferred home was the main impediment.