The average deposit needed to buy a home is now €52,500 for a first-time buyer (FTB) and €135,000 for a mover purchaser, according to the latest figures from the Banking and Payments Federation Ireland (BPFI).
This is more than double what it was a decade go. It reflects the rapid steep increase in house prices since the property crash in 2012.
The BPFI’s latest housing market monitor includes a loan-level analysis of the source of deposits in the first half of 2021.
Nearly half of FTBs (42 per cent) and 25 per cent of mover purchases used gifts as part of their deposit, according to the report.
The total value of gifts towards deposits in 2021 as almost €210 million, €149 million for FTBs and €60 million for mover purchasers. People's savings accounted for €795 million.
In the case of mover purchasers, inheritance and the proceeds from the sale of a previous property also contributed significantly towards deposits.
BPFI chief executive Brian Hayes said: “House price growth has accelerated in recent months mainly due to the imbalance between supply and demand, where supply was seriously affected due to the pandemic.”
He added that residential property prices increased by 12.4 per cent in the year to September 2021 at the national level.
“In contrast, the lower-than-estimated supply, due to the pandemic, in 2020 and 2021 has put further pressure on average prices and affordability is becoming challenging with average rents also at their highest levels, more than one-third higher than their peak in 2008,” he said.
The report found that the annual rate of rental inflation was recorded at 7 per cent in the second quarter of 2021 with the national standardised rent level increasing to €1,352.