First-time buyers are typically paying €88,000 more for a house now than they did five years ago, according to a new report by the Banking and Payments Federation Ireland (BPFI). It attributes the rise to “a general increase in property values” and “a notable shift to new properties”.
In its latest mortgage market report, which looks at the profile of borrowers, their loans and property types, the industry group said the median income of first-time buyers buying a new property in the first half of 2024 was €90,000, while their median age was 35. This is significantly older than in previous decades, reflecting the affordability challenge facing buyers.
The median income for existing homeowners moving to a new property using a mortgage was €118,000.
The report found that the median or mid-value price paid for property by a first-time buyer (which could be single person or a couple) rose from €272,000 to €360,000 between the first half of 2019 and the first half of 2024.
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The increase was more than €100,000 in four regions: Wicklow (which surpassed Dublin as the county with the highest median first-time buyer property value at €442,000), Galway, Limerick and the midlands.
The study reports that the median price paid for a home by mover purchasers increased by €109,000 to €470,000 over the same five-year period.
It also showed that average mortgages taken by both first-time buyers and by existing homeowners moving homes have reached record levels at €289,126 and €329,873 respectively.
But mortgage volumes remain well below their Celtic Tiger peak in most segments of the market, and as low as 8 per cent of peak volumes for home movers buying newly built properties.
The exception was first-time buyers drawing down loans to purchase second-hand properties, which was approaching the previous peak of 7,726, recorded in the first half of 2006.
Dublin was by far the largest regional market in the 12 months to the end of June, commanding 31.5 per cent of the share of residential mortgage volumes. Cork was second at 11.6 per cent of mortgage volumes.
BPFI chief executive Brian Hayes said: “Today’s mortgage market profile highlights the considerable increase in median property values over the past five years, especially in regions like Wicklow, Galway, Limerick and the midlands, where the median FTB [first-time buyer] property value increased by €100,000 or more.
“Looking more closely at these four regions, there has been a clear shift from FTB mortgages for lower-value second-hand properties to higher-value new properties,” he said.
Figures from Goodbody Stockbrokers, published separately on Thursday and based on Building Control Management System data, show the number of housing starts this year has surged above 60,000.
December has been another strong month, with more than 5,000 homes “commenced” up to December 17th, Goodbody chief economist Dermot O’Leary said.
“This takes the total for the year to an estimated 60,000, relative to 32,801 in 2023,” he said, noting that the surge in commencement notices this year was aided by waivers on development levies and rebates on water charges.
“While it is not clear whether all of these projects will eventually lead to completions over the next two years, it is clear that this supply-side incentive has been effective,” he said.
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