First-time buyers and home movers are paying the highest mortgages since records began a new housing report has claimed.
It also found the properties they are buying have increased in value by about €88,000 between H1 2019 and H1 2024 to €360,000.
The latest Mortgage Market Profile Report H1 2024 by Banking & Payments Federation Ireland (BPFI) reveals the median home mover property value increased by €109,000 to €470,000 over the same five-year period.
The report found FTBs were shifting away from second hand properties and going all out to buy more expensive new properties.
The median FTB property values increased by €100,000 or more between H1 2019 and H1 2024 in Wicklow, Galway, Limerick and the Midlands, where there has been a clear shift in activity from second hand to new properties.
This latest report looks at the profile of borrowers, their loans and property types on a national and regional basis.
It found that the average mortgage values have reached new highs with the average first time buyer (FTB) and home mover mortgage values rising to their highest levels since the data series began in 2003, at €289,126 and €329,873.
By contrast, mortgage volumes remain well below peak levels of the mid-2000s in most segments, and as low as 8% of peak volumes for home movers buying new properties.
The exception was FTB drawdowns on second hand or existing properties, which was approaching the previous peak of 7,726 in H1 2006.
The report also found the number of FTB mortgages to buy or build new properties reached the highest H1 figure since 2008 at 3,997.
By contrast, the number of FTB mortgages on second hand properties fell to the lowest H1 level since 2021 at 7,224.
But the volume of mortgages for home movers on new properties fell to 806 in H1 2024, the lowest H1 level since 2015.
The report also looked at the incomes of those trying to get on the property ladder.
It found the median income for FTBs using a mortgage for a second hand property increased by 5.3% year-on-year to €79,000 while the median income for those buying or building a new property decreased by 3.8% to €90,000.
The median income for mover purchasers using a mortgage in H1 2024 was €118,000.
Brian Hayes, Chief Executive, BPFI said: “Today’s Mortgage Market Profile highlights the considerable increase in median property values over the past five years, especially in regions like Wicklow, Galway, Limerick and the Midlands where the median FTB property value increased by €100,000 or more.
"Looking more closely at these four regions, there has been a clear shift from FTB mortgages for lower value second hand properties to higher value new properties.
"In fact, the share of FTB mortgages secured on second hand homes valued up to €300,000 fell by about 20 percentage points between H1 2019 and H1 2024 in each region.
"Over the same period, in Wicklow, Galway and Limerick, the share of FTB mortgages secured on new properties valued over €300,000 increased by about 20 percentage points.
"In the Midlands, some 38.6% of FTB mortgages in Q1 2024 were on new properties valued over €300,000, up from 5.7% five years earlier.”
Mr Hayes added: “Reflecting rising property prices, we’ve also witnessed a significant upward shift in average home mortgage values which reached new peaks in almost all segments in H1 2024.
"One of the key drivers of this trend is the notable shift towards new builds, which are designed to meet modern standards such as higher energy ratings and typically command a higher price.
"This is amid rising incomes and a record employment rate, with the number of people employed in the Irish economy increasing by about 442,000 between Q2 2019 and the second quarter of this year.”
Mr Hayes concluded: “Overall, it’s clear that the mortgage market is continuing to evolve toward higher-value properties, as homebuyers prioritise energy-efficient and more modern homes.
"We are also seeing the continuation of the trend identified in previous reports where Dublin-based FTBs are increasingly looking to locations outside of the capital.”
