What it takes to buy a property in Ireland right now

What it takes to buy a property in Ireland right now

What it requires to buy a property in Ireland nowadays was outlined by a new study from the Central Bank this week.

The overview of residential in lending in Ireland shows there were 29,893 new mortgage loans issued last year with a total value of €5.7 billion.

That represents 62.9% of the 47,527 transactions recorded last year meaning cash buyers still make up just over a third of the market.

The study revealed that first-time buyers borrowed an average of 78.8% of the value of the property they were buying and 2.9 times their income in 2016.

Second and subsequent buyers borrowed an average of 66.4 per cent of the property value and 2.4 times income.

The loan-to-value and loan-to-income averages observed were similar to the averages found for 2015.

Compiled using data from all the main mortgage lenders including AIB, Bank of Ireland, Permanent TSB, Ulster Bank and KBC Bank Ireland, it shows that the average loan drawn down by first-time buyers under the rules was €185,939, while the average property price was €250,361.

This compares to an average loan of €172,872 and an average house price of €234,599 in a similar study published last summer relating to 2015 data.

The average income for first-time buyers in 2016 was €67,287, up from €64,721 in the previous study.

For second and subsequent buyers the average loan drawn down within the scope of the Central Bank regulations in 2016 was €217,602, with an average property price of €390,933 and an average income of €106,421. These numbers were also higher than they were in 2015.

Some 56 per cent of first-time buyers in 2016 were single borrowers, down from 57.5 per cent in 2015, while by contrast 72 per cent of loans to second and subsequent buyers were to couples, down from 73 per cent.

The average age of first-time buyers was 34, up one year on 2015, while the average age for second and subsequent buyers was once again 41.

Some 35 per cent of first-time buyers bought properties in Dublin, while 42 per cent of loans to other buyers were for properties in the capital.

The average interest rate for first-time buyers was 3.6 per cent. About 56 per cent of this group had a fixed interest rate mortgage in 2016, with 44 per cent on standard variable rates.

The average interest rate for second and subsequent buyers was 3.3 per cent, while in contrast to first-time buyers, 53 per cent had a standard variable rate mortgage in 2016. Some 65 per cent of second and subsequent buyers had a loan-to-value of less than 80 per cent.

What are your thoughts on the figures?

  • Do you feel you could get the average loan amount?
  • Are you worried that you might be above the average age of getting a loan?
  • What other concerns have you about buying?

Have your say below…

There are 2 comments for this article
  1. daniel bruno at 3:35 pm

    i’m an irish u.s .citizen.i’m thinkining of buying a home on the west coast.what are some of the obstacles i should be concerned with. can i finance through a bank there or am i going to have to go through a bank in the u.s.
    thank you

  2. Brian Buckley at 6:02 am

    Why don’t we have statistics that separate Dublin from the rest of Ireland – there are two completely distinct property markets in Ireland – these overall statistics are therefore completely meaningless.

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