The Daily Star Ireland
First-time buyers in Ireland are now taking on larger loans relative to their incomes than buyers in the UK for the first time since the Celtic Tiger era, according to a report from property website MyHome.ie in collaboration with Bank of Ireland.
The report reveals that the average mortgage loan for a house purchase has surpassed €300,000 for the first time, marking a 7% increase compared to last year. Annual asking prices for homes have also risen by 8.4%, with properties selling for an average of 9% above the asking price. One in seven homes are being sold for 20% over the listed price. Data from the Central Statistics Office shows that sale prices have increased by nearly 10% over the past year.
Conall Mac Coille, chief economist at Bank of Ireland, highlighted that despite stretched affordability in 2024, housing prices have yet to show signs of slowing down. He noted that market demand remains strong and has intensified as the year progressed.
The report indicates that first-time buyers are borrowing more, with the average loan reaching 3.37 times their income in the first half of last year, compared to 3.25 times in the same period of 2023. This trend follows changes in the Central Bank’s mortgage lending rules, which now allow first-time buyers to borrow up to four times their income. By mid-2024, half of all first-time buyers had taken out loans near this maximum limit.
Mac Coille pointed out that rate cuts from the European Central Bank are likely to support house prices. However, he cautioned that any initial improvement in affordability could be offset by competitive bidding among homebuyers, which would drive prices higher.
He predicts a 4% rise in house prices this year, though he added that this forecast might be conservative. Additionally, he noted that the average age of first-time buyers has increased to 36 years, up from 34 years just four years ago.
The report also observed a cooling trend in the growth of rental prices in Dublin, where rents rose by 2.5% over the past year. In contrast, rental prices outside the capital saw a sharper increase of 8.9%.
