First-time buyers need deposits of € 52,500 as house prices rise

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The average deposit required to buy a home is now € 52,500 for a first-time buyer (FTB) and € 135,000 for a moving buyer, according to figures from the Banking and Payments Federation Ireland (BPFI).

This is more than double what it was less than a decade ago, reflecting the rapid rise in house prices since the bottom of the 2012 crash and the mortgage lending rules of the Central Bank of Ireland , which force buyers to have larger deposits relative to the value of the property.

BPFI’s latest housing market monitor includes an analysis of the level of lending from the source of deposits in the first half of 2021.

He found that nearly 42 percent of FTBs and 25 percent of movers buyers used giveaways as part of their deposits.

The total value of donations to deposits was nearly 210 million euros, 149 million euros for FTBs and 60 million euros for move buyers, while own savings amounted to 795 million euros. , he clarified.

For moving buyers, inheritance and the proceeds from the sale of a previous property have also proven to be a significant source of deposits.

Commenting on the rise in house prices which he said was weighing on deposit amounts, BPFI Managing Director Brian Hayes said: “House price growth has accelerated in recent months mainly due to the imbalance between supply and demand, where supply has been seriously affected due to the pandemic. ”

He noted that residential property prices rose 12.4% in the year through September 2021 nationally.

“On the other hand, the lower supply than estimates, due to the pandemic, in 2020 and 2021 has put additional pressure on average prices and affordability is becoming difficult with average rents also at their highest levels, more than ‘a third higher than their peak in 2008,’ he said.

The BPFI report notes that the annual rent inflation rate was recorded at 7% in the second quarter of 2021, with the national level of standardized rent rising to € 1,352. In Dublin, 69% of properties paid rent over € 1,500.

Separate data from CSOs indicates that 35.8% of tenants had total gross income below € 20,000 in 2019 and 57.9% had income below € 30,000.

Regarding the housing supply, the BPFI noted that some 13,574 housing units were delivered over the nine months ending in September 2021, a slight increase compared to the same period in 2020.

The group said the number of housing starts hit an all-time high with nearly 31,000 units started during the year through October. Dublin and the capital’s suburban belt accounted for over 60 percent of these reviews.

In its report, BPFI said there was a close relationship between the number of starts in one year and the number of completions the following year. “The only downside risk to the estimated increase in completions in 2022 is the growing share of apartments nearing completion and the likelihood that apartment starts will take longer to complete,” he said. he declares.


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