The latest report on the housing market from the BPFI shows the average age and income of first-time buyers continues to increase.
Every six months the Banking & Payments Federation Ireland (BPFI) releases its Mortgage Market Profile report, which contains a host of insightful information on the state of the Irish mortgage market. And this latest report, which covers the first half of 2023, is no different.
Despite all the headwinds facing the property market in recent times such as a lack of supply, record prices, and rising interest rates, the report shows the Irish mortgage market remains very active.
For example, in the first half of the year, 11,313 first-time buyers drew down a mortgage and got the keys to their own home, the highest number since 2007!
Let's see what else the report is saying...
What’s the data saying?
With property prices continuing to increase - albeit at a much lower level compared to recent years - it's no surprise that one of the main findings of the report is that the median amount first-time buyers are borrowing continues to go up.
The median first-time buyer mortgage increased by €20,000 year-on-year to €270,000. And more than half (57%) of first-time buyer drawdowns now involve high-value mortgages of over €250,000.
For movers, the median mortgage amount rose by just under €4,000 to €290,500.
However there are significant regional variations. While the median first-time buyer mortgage amount rose in all regions, it increased by more than €26,000 in Kildare, Limerick and Meath. On the other hand, in four regions (the Border, Midlands, South and Mid West, and West regions), the median mortgage amount was less than €215,000.
The age at which first-time buyers get on the property ladder also continues to creep ever higher, according to the report.
The median age of first-time buyers rose to 35, its highest on record, while the share of first-time buyers who are over 35 increased to 44%, up from 36% in 2019 and just 17% in 2004, according to historical data from the Department of Housing.
Currently only 20% of first-time buyers are under the age of 30, compared to 60% in 2004.
The median household income of first-time buyers also continues to rise.
The median household income for those buying a second-hand property rose by €4,000 year-on-year to around €75,000. In 2020 it was just €64,000.
For those buying a new-build it was much higher at €93,000, an increase of over €7,000 compared to the first half of 2022.
However the income of first-time buyers purchasing a new-build in both Dublin and Kildare was over €100,000.
And for movers, it was €111,000 nationally.
The report suggests that part of the reason for the higher incomes is that, because buyers are getting older, they are more advanced in their careers and thus earning more. However the fact that house prices continue to creep ever higher is also a major factor as it means buying a property is increasingly out of the reach of those on more moderate incomes.
Rising mortgage repayments
With mortgage rates on the rise and property prices still inching up, it's no surprise that the average mortgage repayment continues to shoot higher.
The median repayment for a first-time buyer purchasing a second-hand home has risen by €139 a month compared to the first half of 2022 and is now €1,139.
However for those buying a new-build, the median repayment rose by almost €200 a month to €1,437.
Again, there are wide regional variations as you would expect. The average repayment for a first-time buyer in Dublin who is buying a second-hand property is €1,402 a month while it's a hefty €1,679 for a new-build.
Meanwhile, in the West region, repayments are lowest at just over €800 a month on an existing property and €1,095 a month on a new-build.
For home movers, the average repayment nationally is now just over €1,500 a month.
Loan terms have remained pretty stable in recent years, with the median mortgage term for first-time buyers remaining at 30 years, where it's been since at least 2012.
The share of mortgages with terms of 30 years or more remains stable at about 40%. And around 11% of mortgages had a term of 35 years, which is the longest mortgage term currently available in Ireland.
Our latest Mortgage Market Profile continues to point to a trend we’ve seen emerge in recent years, which is that first-time buyers are very much dominating the mortgage market, despite headwinds from rising property prices and European Central Bank interest rate increases.
Brian Hayes, Chief Executive, BPFI
Check out our mortgage articles
If you’re looking for more information before applying for a mortgage, take a look at some of our mortgage guides.
- With mortgage rates on the rise, homebuyers have to make the tough decision between a fixed or a variable rate. You can learn about the pros and cons of both in this guide.
- Discover how mortgage applications are assessed in this guide.
- Everyone needs to abide by the Central Bank's mortgage lending rules, which you can read about here.
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Whether you’re a first-time buyer, home mover or looking to switch your mortgage, you can easily compare interest rates, loan terms, mortgage offers and cashback incentives with our mortgage calculator.
We compare rates from all of Ireland’s mortgage lenders to help you find the best mortgage offering on the market. And our new mortgage broker service means you can also apply for your mortgage with us too.
Simply head over to our insurance page to compare quotes. You could even be covered in under an hour.
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