No surprise really.
The average age of first-time buyers in Ireland has risen by five years, or 17%, since 2006, according to figures released by the Real Estate Alliance (REA).
An REA report revealed that the average age of the first-time buyer is now 34, compared to 29 in 2006 and 33 last year, with the rise in the average age attributable to a combination of factors.
As a result, a leading estate agency group are predicting that home ownership may soon be a pipedream for those in their twenties.
REA agents around Ireland are reporting that first-time buyers in their twenties and early thirties are now mainly absent from the market for properties priced over €160,000.
The REA report also found that there has been a huge increase in buyers from outside of Ireland who have been living and working in Ireland for years and are now setting up home here.
30% of first-time buyers in areas such as Carlow, for instance, are from Eastern Europe.
Commenting on how difficult it is for young people to get their foot on the property ladder in Ireland, 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.
“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.
“The introduction of the Central Bank’s requirements, combined with higher rents, has made it increasingly difficult for young people to save deposits, especially in Dublin.
“House ownership is now off the table for many couples earning average salaries, with their only hope of purchase now coming from an injection of outside help, usually from close relatives.
“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 our 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 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 our first-time buyer is being pushed upwards.”
“Many potential purchasers are in rented accommodation and are having difficulty in paying high rents and saving for a deposit for houses that they would otherwise comfortably afford,” O’Connor added.
“While we welcomed the introduction of guidelines from the Central Bank, we feel that they are not reflecting the reality of the market.
“For example, the mortgage multiplier is 4.5 times income in the UK and this is something that we need to revisit under current rules.
“We also need the Central bank to acknowledge that the market for first-time buyers is being stalled by second-time buyers being unable to move out of their starter homes due to the restrictions of the Central Bank 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.”
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