Typical income of first-time buyers of new homes now above €90,000

Savings made during the pandemic are beginning to have a significant impact on mortgages, according to the Banking and Payments Federation (BFPI).

The banking lobby group’s latest review of the Irish mortgage market showed the sharp rise in house prices is not reflected in mortgage values.

It found the median value of properties purchased by first-time buyers, excluding so-called self-builds, rose by €35,000 to €320,000 between 2020 and 2022. At the same time, the typical mortgage drawn down by a first-time buyer increased by only €24,000 to €254,000.

This was indicative of “a more prudential approach by borrowers” and reflected increased savings during the pandemic, the banking group said.

The report also found that the typical, or median, income of first-time buyers of new properties in Ireland is now over €90,000.

The “median basic household income” of first-time buyers of existing properties in the second half of last year was €74,000 per annum. This rose to €91,000 for first-time buyers of new homes and to €109,000 for mover purchasers.

The median income of first-time buyers of new homes in Dublin was €103,000.

It also found first-time buyers continue to dominate the mortgage market with over 14,000 drawdowns in the second half of last year – the highest six-monthly volume since 2007.

Brian Hayes, chief executive of the BFPI, said it remains a difficult environment for buyers but savings are clearly helping.

“Property prices continue to increase year-on-year, albeit at a slower rate, and it remains a difficult environment for many buyers. However, the latest Mortgage Market Profile Report indicates that borrowers are being prudent and bringing more equity to purchases, likely in order to minimise borrowing costs,” he said.