One in three first-time buyer (FTB) homes in 2024 were priced above €400,000 — a figure that has tripled since 2019, according to the latest mortgage report from Banking and Payments Federation Ireland (BPFI), reports RTE.
The Mortgage Market Profile Report for the second half of 2024 outlines a notable rise in property and mortgage values for FTBs over the past five years, alongside increases in mortgage repayments and household incomes.
The report analyses borrower characteristics, loan details, and property types across national and regional levels, reports RTE.
For first-time buyers, the median property value climbed by more than €100,000 from 2019 to 2024, a 37% increase, reaching nearly €372,000.
In the same period, the median mortgage loan rose by €78,000, or 36%, bringing the figure close to €294,000, reports RTE.
Median household income for FTBs also rose, growing 22% from €70,000 in 2019 to €85,000 in 2024.
There was a surge in higher-value mortgages over €300,000, with the share doubling to 44%, while the share of lower-value mortgages under €200,000 fell by more than half, down to 21%, reports RTE.
Speaking on RTÉ’s Morning Ireland, BPFI CEO Brian Hayes said rising property prices are unsurprising due to an imbalance between supply and demand.
“It highlights the kind of pressures that the first time buyer is in, where on average they have to get a lending position just short of €300,000 and on average they’re buying a house of about €370,000”, reports RTE.
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“Now the other side of that is, of course, that over the same five year period the average increase in first time buyer incomes is up about 22%, so you have this kind of perfect storm, a lot of people chasing too few houses, incomes rising and the economy at full tilt,” he stated, reports RTE.
“And I think there are particular issues for first time buyers, which I think everyone recognises,” he added, reports RTE.
Earlier this week, the Central Bank lowered its projections for housing completions to 32,500 for this year and issued reduced forecasts for the next two years as well.
Mr Hayes stressed that banks are central not only to mortgage lending but also to development financing. He noted that a third of all new homes built over the last two years were supported by Irish banks through development finance.
“What’s critically important is that we get international capital back, the big difference in the last two years has been the the fall off in international capital,” he said, reports RTE.
“My message is that international capital goes where its welcome and it stays where it’s well treated and it wants to see consistency,” he added, reports RTE.
“I think the international capital that is critical for apartment development, the banks play a big role in that, not only do we take part of the lending position there, but we also act with international capital, because we have distribution models, we know the economy and we know the sectors,” he said, reports RTE.
“International Capital partners with the banking sectors here in Ireland and we need that partnership up and running again and I hope the certainty that the Government have now given on the rent pressure zone will help that international capital to come back to the country,” he added, reports RTE.
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