The average age of first-time house buyers in Ireland has risen by five years over the past decade, from 29 to 34, according to a report from estate agency group Real Estate Alliance, who predict that home ownership may soon be a pipe dream for those in their twenties.
In the past year, the average age of first timers has gone from 33 to 34, with a combination of factors barring the entry of young people into the housing market, REA says.
REA agents around Ireland are reporting that first-time buyers in their 20s and early 30s are now mainly absent from the market for properties priced over €160,000.
REA chairman Michael O’Connor said: “A definite two-tier system has emerged over the past year nationwide, with €160,000 emerging as the breaking point for interest from buyers in that age group, ruling out most properties in Dublin.”
Another factor is the recent strength of buyers from outside Ireland who have been living and working here for over a decade, and who are putting down roots and buying houses. In areas such as Carlow, REA agents are reporting that 30% of first-time buyers are now from Eastern Europe, a percentage that has grown rapidly over the past two years.
O’Connor added: “The biggest factor influencing the market this year has been the Central Bank deposit rules which have created a two-tier system, ruling out home ownership for many young people due to over-restrictive guidelines,” said O’Connor.
“From a Dublin price perspective, the rules don’t make sense, with the combination of the deposit rates and the multiplier falling far short of the average three-bed semi price in Dublin city and county of €334,000.
“A couple on a combined average industrial wage income of €74,000 can borrow 3.5 times their income, making a total of €259,000. Many of them will struggle to raise a deposit of €35,000, but if they do it gives gives them a maximum buying power of €294,000.
“Those figures, and the level of savings required, go a long way to explaining why the average age of first-time buyer is being pushed upwards. Also, the mortgage multiplier is 4.5 times income in the UK as against 3.5 here, and this is something that we need to revisit.
“We also need the Central Bank to acknowledge that the market for first-time buyers is stalled by second-time buyers being unable to move out of their starter homes due to the restrictions of the rules. They need the same 10% deposit derogation as first-time buyers and the notional €220,000 limit needs to be raised to reflect the reality in the area of most need — Dublin.”