One in three first time buyer (FTB) homes were valued over €400,000 in 2024, three times the 2019 share, according to the latest BPFI mortgage report.
The Mortgage Market Profile Report for the second half of 2024, from Banking and Payments Federation Ireland, shows a significant increase in FTB property and mortgage values between 2019 and 2024, as well as an increase in mortgage repayments and incomes.
This latest report in the series looks at the profile of borrowers, their loans and property types on a national and regional basis.
For first time buyers, the median property value rose by over €100,000 between 2019 and 2024, up 37% to almost €372,000.
During the same time, the median mortgage value increased by €78,000, or 36%, to almost €294,000.
The median basic household income for first time buyers increased by 22% from €70,000 in 2019 to €85,000 last year.
There was also an increase in the share of higher value mortgages, over €300,000, which doubled to 44%.
The share of lower value mortgages, up to €200,000 more than halved to 21%.
Speaking on RTÉ’s Morning Ireland, BPFI CEO Brian Hayes said the increasing house price inflation is no great surprise because we have too many people chasing too few homes.
“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”.
“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.
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“And I think there are particular issues for first time buyers, which I think everyone recognises,” he added.
The Central Bank this week revised downwards its forecast for how many homes will be built this year ( to 32,500) and over the following two years.
Mr Hayes noted that the banks are fundamental to the financing of not just mortgages, but also to the financing of development finance, adding that a third of all the homes built in the last two years have been built by the Irish banking sector in terms of 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.
“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.
“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.
“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.
