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Mortgage Market Profile Report – H1 2021

Share of first-time buyers aged 30 or under more than halved between 2004 and 2020 to 27% – new BPFI mortgage report

  • Dublin had highest FTB median mortgage repayment of €1,107 followed by Wicklow, Kildare, and Meath in H1 2021
  • Self-builds play key role in market making up 37% of FTB mortgages for new properties and almost 47% of mover purchaser mortgages for new properties

Thursday 25th November 2021 – A new detailed mortgage report published today by Banking & Payments Federation Ireland (BPFI) shows that the average age of home mortgage borrowers continues to increase with the number of first-time buyers (FTBs) aged 30 or under more than halving in the last 16 years falling from 60% in 2004 to 27% in 2020.

The mortgage market profile report, which shows an overall recovery in the current mortgage market back to 2019 levels following Covid-19, looks at a range of factors including a regional breakdown of the market, the age profile of borrowers as well as a comparison of mortgage repayments by customer, property and region.

Market Recovery

Highlighting the recovery which has been seen in the market this year following the turmoil cause by the pandemic, the report shows drawdowns for homeowners (FTBs and mover purchasers) rose by 23% year on year in H1 2021 to more than 14,000, similar to the level of drawdowns in H1 2019. FTBs accounted for 67.5% of drawdowns in H1 2021, while FTBs buying existing properties accounted for 47.4% of the total.

Younger borrowers a decreasing share of drawdowns

Examining the age profile of borrowers, the report shows how older borrowers are increasing their share of the mortgage market. Some 60% of FTBs were no more than 30 years old in 2004, according to the Department of Housing, Local Government & Heritage. Eight years later, that proportion had dropped to 42%, and fell further to 27% by 2020. Similarly, about one third of mover purchasers were no more than 35 years of age in 2012. By 2020, that proportion had more than halved to 17%. The report explains how a number of factors may be driving the ageing of home buyers with major life events that have prompted household formation, especially marriage and having children, occurring later in life*.

Regional differences in drawdown volumes and mortgage repayments

Looking at the regional breakdown of the mortgage market, Dublin leads the way with 31.3% of home purchase mortgages in the twelve months ending June 2021, while commuter counties Meath, Kildare and Wicklow each had at least 4% of the national market. Outside Dublin and the commuter belt, Cork is the largest single market with 11.7% of mortgages, followed by Galway and Limerick with 4.8% and 3.8% each. The share of mover purchase mortgages varies significantly by region.

Mortgage repayments by region

The report shows that in H1 2021 the median monthly mortgage repayment for FTBs was €841, more than €300 less than that for a mover purchaser. Dublin had the highest FTB median repayment of €1,107 followed by Wicklow (€1,054), Kildare (€976) and Meath (€942). The counties with the two biggest cities outside Dublin (Cork and Galway) had median repayments between €800 and €900. All other regions had median repayments of less than €730.

Self-builds

Assessing the key role which self-builds are playing in the housing and mortgage market, the report finds that self builds accounted for 37% of FTB mortgages for new properties and almost 47% of mover purchase mortgages for new properties. In most regions (the exceptions are Dublin, Cork, Kildare, Meath and Wicklow), mortgages for self-builds outnumbered mortgages for the purchase of new builds.

Commenting on the findings of the report, Brian Hayes, Chief Executive, BPFI said: “This detailed report provides important insights into the mortgage market in Ireland and, for the first time, gives us a very clear picture of the market across many dimensions, from age and type of house to geographic location.”

“The most welcome finding, first of all, is that we can see a strong and full recovery in the mortgage market in H1 2021 following the extreme difficulties that were experienced last year with drawdown figures back to 2019 levels. However, the impact of Covid-19 restrictions continues to be felt on home loans for new properties, with existing houses accounting for close to 50% of the First Time Buyer Market, who in themselves account for a large majority of the overall mortgage market.”

“Looking forward however it’s encouraging to see from the latest CSO and Department of Housing figures that there were more than 24,000 housing starts and almost 14,000 completions in the first nine months of this year. During that same period our own data shows that BPFI members have been supporting customers with almost 22,000 mortgages approved for FTBs and almost 10,000 for mover purchasers and will continue to support people around the country looking to buy or build their new home.”

ENDS/

*According to the Central Statistics Office the average age of mothers rose from 31.3 years in 2009 to 33.1 in 2019, while 19% of marriage partners were less than 30 years of age in 2020, compared with 35% in 2010 and 53% in 2000.

For further information contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie  

About BPFI: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has over 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here. www.bpfi.ie

The BPFI Mortgage Market Profile Report H1 2021 is available for download below in PDF format.

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