Home prices have risen faster than mortgage values as borrowers remain prudent – latest BPFI mortgage report H2 2022
- Median value of properties purchased by FTBs (excluding self-builds) rose by €35,000 between 2020 and 2022 to €320,000 while median mortgage increased by €24,000 to €254,000.
- Median monthly mortgage repayments nationally stood at €1,089 for FTBs (excluding self-builds) and €1,406 for mover purchasers.
- Regionally FTB repayments varied significantly in six urban counties of Dublin, Cork, Kildare, Meath, Wicklow and Galway versus the rest of the country.
Wednesday 24th May 2023 – The latest Mortgage Market Profile Report H2 2022, published today by Banking & Payments Federation Ireland (BPFI) shows that while increasing mortgage drawdown values reflect the sharp post covid rise in property prices, the rise in median mortgage values between 2020 and 2022 was significantly less than that of median property prices.
The report, which which looks at the profile of borrowers, their loans and property types and how this has changed since before the pandemic, shows that while the median value of properties purchased by FTBs (excluding self-builds) for example, rose by €35,000 between 2020 and 2022 to €320,000, the median mortgage increased by only €24,000 to €254,000 indicating a more prudential approach by borrowers and reflecting saving trends which emerged during the pandemic.
Regionally, with the report showing Cork and Kildare trailing Dublin in the mortgage market, it also shows FTB repayments varied significantly across the country in H2 2022, with the median FTB repayment in the six urban counties of Dublin, Cork, Kildare, Meath, Wicklow and Galway over €1,000 while in the rest of the country more than half of FTB mortgages had repayments up to €1,000.
Key findings from the report show:
- FTBs continue to dominate the mortgage market reaching the highest semi-annual volumes since H2 2007 with 14,018 drawdowns in H2 2022.
- In the overall market, activity in most home mortgage segments had exceeded H2 2019 levels by H2 2022, with the exception of movers buying or building new properties, the volume of FTB loans on existing properties reached the highest semi-annual level since H2 2005 at 9,270, and the average drawdown reached the highest semi-annual level in all segments.
- The median value of properties purchased by FTBs (excluding self-builds) rose by €35,000 between 2020 and 2022 to €320,000 while median mortgage increased by €24,000 to €254,000.
- Nationally, the median monthly mortgage repayment (excluding self-builds) rose by more than €100 for FTBs between H2 2020 and H2 2022 to €1,089 and by about €140 to €1,406 for mover purchasers over the same period, reflecting higher housing prices and larger loans.*
Regionally, median FTB repayments were over €1,000 in Dublin, Cork, Kildare, Meath, Wicklow and Galway while in the rest of the country, more than half of FTB mortgages had repayments of up to €1,000 but that share had fallen since H2 2020.Commenting on the publication of today’s report, Brian Hayes, Chief Executive, BPFI said: “There has been a sharp rise in residential property prices from the middle of 2021, resulting in the continued increase in mortgage drawdown values we’ve seen in recent months. Property prices continue to increase year on year, albeit at a slower rate, and it remains a difficult environment for many buyers. However, the latest Mortgage Market Profile Report indicates that borrowers are being prudent and bringing more equity to purchases, likely in order to minimise borrowing costs. This also likely reflects the trends we’ve seen in household saving, with the current rate of around 20% compared to about 10% pre-pandemic.”
“While the European Central Bank began increasing its base interest rates in July 2022, we’re not yet seeing the full impact within today’s figures. We expect to have better visibility of that impact in the coming months as we continue to monitor trends. If people are finding themselves in difficulty given additional pressures from the rising costs of living, the most important thing to do is to contact your bank or mortgage provider as soon as possible. We also encourage customers to review their eligibility for the government schemes available to FTBs such as Help to Buy or the First home Scheme.”
Regional differences across the country
The BPFI Mortgage Market Profile Report also provides a wealth of data on the regional breakdown of the mortgage market.
Key regional findings from the report include:
- The median FTB mortgage value in 2022 was €315,000 in both Dublin and Wicklow, while Dublin’s median FTB property value was only €5,000 higher than Wicklow’s at €400,000.
- Cork was the second largest mortgage market with 12.9% of FTB new property and 10.3% of FTB existing property mortgages in 2022.
- Some 12% of FTB mortgages in Galway were for apartments, the second highest proportion in any region, after Dublin.
- Some 56% of mortgages in Limerick were for FTBs buying existing properties, the highest share of any region.
- In the West some 62% of new properties financed by home mortgages were self-builds in H2 2022, down from 76% in H2 2020.
The BPFI Mortgage Market Profile Report H2 2022 is available on the BPFI website here.
* While the European Central Bank began increasing its base interest rates in July 2022, these figures do not yet show the full impact on rates paid by new borrowers
Note: 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 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.