So, let’s talk about buying a house…


First-time buyer (FTB) mortgages and household incomes in Ireland have reached record levels. A report, the latest Mortgage Market Profile Report from Banking & Payments Federation Ireland (BPFI), provides a detailed analysis of the mortgage market. It highlights “significant trends and shifts in borrowers’ profiles and regional dynamics”.

It outlines the highs and lows in the market since 2003 by asking who is taking out home loans, what types of loans, and what types of properties are they building or buying? How the properties are financed and how loans and properties differ from county to county?

The report reveals that the average FTB mortgage increased by €20,000 year-on-year to €270,000 in the first half of 2023. This rise is set against a backdrop of increasing household incomes, which for FTBs grew by 6.5% during the same period. The increase in “mover mortgages” was more modest, rising by less than €4,000 to €290,500.

More than half of FTB drawdowns were above €250,000, with 56% of these borrowers having household incomes over €80,000, representing the highest proportions recorded by either the BPFI or the Department of Housing.

As is to be expected in the Dublin and Kildare region the average FTB income on new property mortgages has risen above €100,000, reflecting increases of around €12,000 and €11,000 respectively. Whereas the south east region, which includes Kilkenny, had the lowest average property value for first-time buyers buying new property across all regions. The area also had a relatively low average income for first-time buyers, the third lowest across all regions.

The average age of FTBs has risen to 35, the highest on record, with 44% of borrowers now over 35, up from 36% in 2019 and just 17% in 2004. This demographic shift suggests that higher incomes, which typically increase with age, are a significant factor in the ability to secure larger mortgages –whereas only 20% of FTB borrowers are under 30, a sharp decline from 60% in 2004.

Despite these changes, loan terms have remained stable, with the average term for FTB mortgages holding at 30 years since the first half of 2012. Around 40% of these mortgages have terms over 30 years, with the maximum term at 35 years.

The report also highlights a trend towards “cross-county migration”, driven by changing work practices since the COVID-19 pandemic. With more people working from home and urban house prices soaring, many are moving to commuter belts or rural areas.

Brian Hayes, Chief Executive of BPFI, noted: “First-time buyers continue to dominate the mortgage market despite rising property prices and ECB interest rate increases. In the first half of 2023, there were 11,313 FTB drawdowns valued at almost €3.2 billion, the highest H1 volumes and values since H1 2007.”

He emphasised the importance of thorough research for those considering cross-county moves. Prospective buyers should understand commuting costs, check for local issues like flooding, and consider the social implications of moving to less populated areas.

The report underscores that all borrowers need to plan carefully as they enter the property market especially amid ongoing economic uncertainties.

T: 086 8362633


Previous Stress "Quick Fixes"
Next The economy: some good news at last