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Fiona Reddan, in the Irish Times, reports:

“First-time buyers are struggling to get on the first step of the property ladder as a result of a significant increase in the down payment required to fund the property transaction.”

“According to figures from the Banking & Payments Federation Ireland (BPFI), the average deposit needed to buy a property in Dublin has more than doubled to €51,000 as of the end of 2015, a level of savings which may be out of the reach of many.”

“…The new regulations mainly affect those looking to buy property in the larger metropolitan parts of the country, where a deposit of 80 per cent is needed for property purchases for first time buyers on the portion in excess of €220,000.”

Soaring deposits puts houses out of first-time buyers’ reach (The Irish Times)

Sam Boal/Rollingnews

63 thoughts on “How Much?

    1. Medium Sized C

      Yep.

      It says that in the article.
      But like, in around the cities, that is most places.

      1. orla

        the article says “where a deposit of 80 per cent is needed for property purchases for first time buyers on the portion in excess of €220,000” – that’s wrong.

        1. Matthew

          Yeah, the calculation is this for First Time Buyers:

          For properties below 220k:
          10% of value. (eg. 22k on a 220k property)

          For properties above 220k:
          22000 + (20% of (Value of house minus 220,000)

          So for example, on a 300k property, it’d be 22k + (20% of 80k) = 38000

          In other words, a deposit of 51k would only be required for a FTB when the value of the house was 365k or above. If you’re a FTB and aiming for that sort of value, fair play to you, but you should probably have the deposit saved.

          1. Harry Molloy

            tbf Matt, that’s what you would be paying in Dublin. You could pay less, and I’m sure someone can give an example of a nice semi-d in Eastwall or Tallaght, but it will no doubt be 30 years old, in need of renovation, and inefficient as anything.

            If I’m forking out for a house it needs to be B1 at least as power isn’t getting any cheaper and I intend to stay there for life.

        2. Anne

          Yeah, Orla, they’ve worded it wrong.

          “where a deposit of 80 per cent is needed for property purchases for first time buyers on the portion in excess of €220,000”

          20% deposit required, not 80%.

          Don’t expect these goons to read the words and do maths at the same time.

  1. kirkbadaz

    I live in Tallaght, pretty quiet part good few houses for sale. all under 220k. if you don’t mind the odd Roma gypsy neigbour, that’s not too bad.

    went to a mortgage meeting with my other half sponsored by her public sector union. tbh all snobby middle class types who want a house in Rathfarnham for 500k.

    what ever happened to a starter house.

    1. Harry Molloy

      The concept of a starter house is a load of balls imo, such a concept leads to looking at property as an investment rather than a place to live.

      A house purchase should be seen as something for life.

    2. Anomanomanom

      No such thing as a starter house. If you buy small now chances are you’ll be stuck with it, if the value drops again then your fupped and if the keep rising then you can’t afford the bigger mortgage for the bigger house.

        1. Martin Heavy-Guy

          Then you pointlessly dump away money on maintenance & tax when you could have just as easily been paying rent.

  2. beardedrambler

    Applying for a mortage these days is more of an art form than having the ability to officialy pay back the mortgage I found.

    We were ready to apply back in December, but we’re told to hold off to Jan and we could avail of a larger mortgage if we were approved in the exceptions.

    Jan arrived, and approval was granted.

    Still havent found a house i’d buy. and we are looking at double the 20% cap the article mentions here.

    1. Tish Mahorey

      You sound like one of those mortgage bores who is really just using the opportunity to brag about the amount they were approved for.

      1. beardedrambler

        I cry my self to sleep tonight after i’ve had some oysters and champers due to your harsh comment now #celtickitty

        The real point of my post was to highlite just how unfair the system is, average house price in the city is anywhere above the 350,000 mark right now, and that’s a D rated 20+ year old building.

        Coupling the costs witht he lack of availability and people are buying anything simply to have a home, as opposs to renting. Not that i’d blame them either.

      2. Anomanomanom

        Get approved is not always good. Boi approved me for €270,000 sounds great, it was €55,000 more than property value and 70k more than I needed. They wouldn’t make enough on what I asked for so then wouldn’t give me a mortgage unless I took this ridiculous offer. This was boom times though. I didn’t take it thank god.

        1. Serval

          What?
          You were approved for a mortgage of up to 270K
          and then asked for a mortgage of 200K
          and they refused to give it to you?

          Really?

          1. Martin Heavy-Guy

            I had a similar experience in the boom, albeit a smaller mortgage, and was on part-time temporary work (i.e. they would not give a small loan, only a larger one).

            But just to show that nothing has changed: I recently went to the bank for a meeting (not for a mortgage) and was offered one on my current temporary contract, due to end in 6 months time; I was told it was no problem. Some things never change.

          2. Anomanomanom

            Yes Boi James Street. I reported them and fupp all was done. I was told out straight “we won’t make enough money on you but if you accept €270,000 them we can give you a mortgage.

    2. Anne

      ‘We were ready to apply back in December, but we’re told to hold off to Jan and we could avail of a larger mortgage if we were approved in the exceptions.

      Jan arrived, and approval was granted.

      Still havent found a house i’d buy. and we are looking at double the 20% cap the article mentions here. ‘

      Approved in the exceptions.. (I recall reading they could make exceptions to the 20% rule.. great little country when you know someone)

      “and we are looking at double the 20% cap the article mentions here. ”
      What does this mean? You have 40% of a deposit? Just wondering why would you need an exception to the 20% then? Do they do exceptions on the qualifying amount of a mortgage too? x amount of salary I mean

      1. Anne

        “great little country when you know someone”

        That’s not a dig at you there beardedrambler btw. Just don’t like the exceptions business…

  3. Diddy

    Ergo houses are too expensive. Let the market do it’s work instead of filling the shortfall between wages ( the real economy) and unrealistic property values with credit.

      1. Turt Hell

        I’d argue it is the last government that got us here again so soon. In 2011 property prices dropped to what people would have expected and the market was stabilising, but rather than then adopt post bust growth moderate growth, the government quickly reflated the market by offering an exemption on property capital gains tax. This has led to foreign money pouring in to the country to buy up what they could, allowing the banks to address their balance sheets and helping the domestic market be priced out. This has in turn solidified the rental trap which the last government did nothing to address.

  4. Harry Molloy

    Tbh, the most disappointing for me about the election campaign was that no one even attempted to tackle this problem.

    There is still no real building. All of the discourse has been around social housing which, while a problem, is only part of the problem. We still have the majority of the country at work and looking for gaffs, which they can’t get, which is obviously shoving the price of rent up resulting in situations like we saw in Mountjoy square last week. Also, derelict land is much less likely to be utilised when it is so damn expensive to build.

    The discussion prior to the election was solely focused around social housing and that the provision of such would drive down the costs of the rest of the housing market. We should be looking at this from the other way round, i.e. private housing reducing the price of property and therefore social housing.

    I think the building issue was hijacked to an extent, it’s not all about social housing though the homeless problem is the most visible impact.

    1. Kolmo

      +1

      Listen – The well-connected insider types have to make an absolute killing first on property speculation, when they inevitably re-slaughter that golden goose, they will swiftly exit the market at an extremely fortuitous time like in 2008, and only then will they be gracious enough to let the new-found prosperity seep into the rest of the society they pretend not to inhabit, before then, nothing you mentioned will ever be resolved.

  5. Termagant

    When the time comes I’ll probably be forced into a Lex Luthor-esque real estate scheme. Maybe a plague of raccoons, maybe a radon scare. Melt the icecaps to flood the place, buy it up, freeze the icecaps again. It’ll come together, positive thinking is key.

  6. john

    if you drop the cnetral banks rules prices will go up further, hence estate agents, the CIF and others who make money on property are lobbying for its removal.

    1. Harry Molloy

      True. So they can make more moola. Which would kick off the building again but at the cost of inflated property prices.

      That’s why we need to look at reducing the costs associated with building houses, which will encourage developers to build without pushing up the prices (too much)

      Govt levies are now up to 20% of the costs of building. These need to be dropped, which would piss a lot of people right off as it would seem the developers are getting a handout but it’s the best solution that I am aware of.

      http://www.independent.ie/irish-news/future-proof/government-levies-now-make-up-20pc-of-the-cost-of-buying-a-new-house-31035345.html

      1. Andy

        The levies are definitely part of the problem.
        Why are new builds subject to a charge for the luas but existing houses are exempt even though they also benefit from the Luas. I saw a contribution charge for a mews just inside the grand canal (Leeson St area) which had a levy attached for Metro North – something which will never be built nor would the proposed route come anywhere close to it!
        The design standards are a joke. Max 6 units per common core, minimum number of dual aspect apartments, minimum BER ratings, maximum building heights. If a builder builds something aesthetically crap no one is forced to buy it!
        On top of that if you want to build a high rise then you’ll have an Taisce objecting and dragging planning out for months or years with no material cost to them if they loose. And if an Taisce doesn’t win you’ll have nimby’s and local politician’s objecting too.
        Add on the costs of Part V social housing.
        Build up Dublin. They sky-line everyone wants to protect isn’t very nice at all.

  7. Eoin

    The market has not done it’s work. It has not been allowed do it’s work. There are constant interventions by the banks and the state so no true mark to market value can be found. There are first time buyers competing with the corporation in Dublin for houses. That’s artificially propping up prices using taxpayers money. You’ve got NAMA in there keeping properties from falling to their actual market value too. Now on the other side of the equation, you’ve got this huge deposit business. Which may cause house prices to fall a bit if first time buyers can’t afford to buy in. Or maybe this will keep first time buyers out altogether and open the door for investors only? Is that the plan? I dunno. Either way. Too much intervention. Without intervention properties should drop to their actual value (12-15 times yearly rental cost is the US model for valuation).

    1. Anne

      That sounds a lot like that interfering in the market, that Enda said he didn’t want to be doing in the case of rent controls btw.

  8. Daoud

    Based on recent experiences, isn’t this the way we should be going? Also, ‘Irish Times’ article criticises access to property Time…er..property market’ should be taken with a pinch of suppleme….er….salt.

  9. DubLoony

    The 20% deposit rule used to be standard and is a sensible idea. But then so were affordable houses for single income families.

    The whole construction sector needs a reboot – we need well planned homes, cities and towns. We need sheltered housing, social housing, affordable housing, housing suitable for singles, couples, families & pensioners. We need homes full stop.
    Get building!

  10. Limey Tank

    The central bank say the increase in deposits from 10% to 20% was to cool down the market. This has worked.
    Now the market belongs almost exclusively to investors, who were competing against owner occupiers and finding their returns diminished.

    I’m sure there were a few words in a few ears. NAMA shifting it’s stock to anybody other than councils/owner occupiers. Delays in building projects. etc. etc.

  11. JogOn

    I’ve been finding that the limit of borrowing 3.5 times the combined salary is proving to be a greater hinderance to buying in Dublin than the deposit issue.

    1. beardedrambler

      Very valid point also … But then you need to look at capacity to repay over 30 years, 360,000 over 30 years is averaging at 1600+ depending on bank.

      Average family of two combined income of between 60 – 100 K perhaps . makes for tough repayments even before there are kids, day care etc.

      1. Harry Molloy

        this.

        and the larger tho deposit the later people buy homes. its a bit crap at the moment.

  12. coco

    I hear anecdotally that at current market value, there is not enough profit to be made by building to meet demand. So developers are holding off until prices rise further. Does anyone know why this is the case? Taxes? Red tape? Wages? it doesn’t make sense to me.

    1. Harry Molloy

      it’s true, this has been said for a while and not just by the big bad developers either. See the link in my post above. Mostly govt duties.

      1. coco

        Thanks for that. It makes for depressing reading though! How does this compare to other countries with “normal” housing markets?

      2. Owen C

        If you want cheap housing, build it high and small. But no one wants that.

        If you want cheap housing, build it out in the sticks. But no one wants that.

        If you want cheap housing, allow very easy financing. But no one wants that.

        If you want cheap housing, build lots n lots of it at subsidised prices. This seems to be the most popular idea, but the issue is the capacity of the government/local authorities to actually do this, which no one seems to have particularly good solutions towards.

  13. Peter Dempsey

    Is it actually ok to want to own your own property?

    Always wondered what socialists and other hard left people think of this.

    Anarchists like Andrew Flood, Shane O’Curry and looney lefties such as Paula Geraghty. Angry feminists like Jane Ruffino. Bearded musicians like Allen Blighe.The posh squatters in Grangegorman. What do all of you think?

    Does owning a property mean we’re “part of the capitalist system man”?

    1. Caroline

      You worry too much about these people, whoever they are. Take a deep abdominal breath and just concentrate on being Peter Dempsey.

    2. Martin Heavy-Guy

      Personally I don’t have any interest in owning property for two reasons: 1) The mortgage finances banks, who I don’t support and 2) Ownership is restrictive in terms of location, and our generation is (often) transient

      But I can’t abide this situation because: 1) It’s not fair on people who do want to own property and 2) If ownership is limited now then only those who already own property will continue to own it, and can charge whatever number enters their greedy minds to rent it [although point (2) seems to happen regardless].

      The left-minded among us would hope to regulate, I believe, so that greed is not a factor for the banks or for the renters. Then ownership or renting both become options when you are on low income, and you can have a choice.

      1. Peter Dempsey

        If somebody inherits a property or buys a property from cash resources (no need for mortgage) – is this palatable for the left?

        On reflection, probably not. If somebody has the money to buy a house outright then clearly they’re earning too much and not paying enough tax.

        1. Dόn 'The Unstoppable Force' Pídgéόní

          Who are you talking about on the “left”? Because socialists, communists, social liberals etc would all have a different ideas about how “palatable” this would be.

          1. Dόn 'The Unstoppable Force' Pídgéόní

            You can’t speak of the “left” as a general thing, it’s too disparate. Especially if you are pedantic. Having said that, if you can plop 500k down on a house outright, you are either a drug baron or someone with a very good accountant (equally immoral some might say). Inheritance is different but it does concentrate wealth in the higher income bracket, as does inheritance tax as people of low income are forced to sell off properties that could have been family assets whereas rich people can take that hit.

            I think housing is a human right – everyone has the right to clean, safe, warm, secure, healthy housing that doesn’t take a ridiculous amount of your income to rent/pay for. This is achievable, it was achievable in the past when there was political will, look at the amazing housing built all around the world from the 50s on. That is what political will can get you if people want it. Same with hospitals, same with policing, same with big business not paying tax, same with repealing the 8th, same with any political issue.

            If you have politicians who don’t give a crap, who are happy for your economy to by based completely on one sector, who are happy for people to scramble over the scraps and spend 200% of their income on a house that they will not be able to afford in 6 months then our current systems are what we end up with.

            I am aware this doesn’t answer anything but it’s my daily rant so..

          2. Martin Heavy-Guy

            Agreed with Don. There is no general left, just different schools. My thoughts above couldn’t represent even a small proportion of what the ‘left’ might collectively think, if a group of people were capable of thinking collectively.

          3. Peter Dempsey

            Thanks for your post Don. Can’t reply directly under it.

            I appreciate that there are many factions on the left but it’s good to see that there at least some of you don’t have any antipathy towards people actually owning property (as opposed to renting). I guess I was being influenced by the “All Property Is Theft” that used to get thrown around by angry middle class members of the WSM and SWP in the 1990s.

            I don’t equate having a good accountant to being a drug baron. I know that’s fashionable to make this equivalence (that a man in a suit can do more harm with his creative accounting than a man in a tracksuit can do with a gun) – but that’s really downplaying the long-term mental effects of violent assault.

  14. First Time Buyer

    Should this article not read “Soaring PRICES puts houses out of first-time buyers’ reach”?

    Banking & Payments Federation Ireland (BPFI) is the voice of banking and payments in Ireland and solely represent banks interests. Its very much in a banks interest for property prices to continue to increase.

    This is another attack on the central banks prudent mortgage lending rules. The general consensus from the industry is that these are the “right rules at the wrong time”. What’s the problem asking for a 10% -15% deposit?

    The problem that needs to be addressed is the price that homes are being sold for and the high costs that are being touted for the reason. Is it the price of construction, the prices being paid for land, the hoarding of land, cost of finance or taxes on new homes?

  15. Anne

    Here’s what David McWilliams wrote about this last year –

    http://www.davidmcwilliams.ie/2015/02/02/the-central-banks-new-rules-simply-make-life-even-easier-for-those-who-are-already-wealthy

    “First, the kids of rich parents will be fine, because the parents will pony up. There is some €90 billion on deposit here, so there are plenty of wealthy parents. A move which results in the social endgame of only the relatively rich getting a look in seems to be a bit odd, don’t you think?”

    A bit odd is how he puts it..

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