Record-Breaking Surge in Home Loans: First-Time Buyers Make a Comeback in Ireland

Discover the record-breaking surge in home loans in Ireland, as first-time buyers make a strong comeback. Find out how they secured €1.9 billion in Q3, the highest amount since the Celtic Tiger era. Despite a decline in activity, learn about the factors impacting the market.

First-time buyers in Ireland have experienced a significant surge in home loans, with a total of €1.9 billion drawn down between July and September. These figures, provided by the Banking and Payments Federation of Ireland (BPFI), reveal that this is the highest amount recorded in a third quarter since the Celtic Tiger era. Overall, borrowers acquired 11,614 new mortgages during this three-month period, totaling over €3.1 billion. However, compared to the previous year, there has been a decline of 21.8% in both volume and value, largely due to a sharp decrease in remortgaging and switching activity.

Record-Breaking Surge in Home Loans: First-Time Buyers Make a Comeback in Ireland | ogusyis

The decline in activity can be attributed to borrowers taking advantage of fixed interest rate loans last year in anticipation of rising central bank interest rates. This has resulted in an 81% drop in mortgage switching volumes and a 79% drop in remortgage volumes. Despite this, first-time buyers continue to dominate the market, accounting for more than 60% of all mortgages drawn down in the third quarter. The latest data reveals that first-time buyer volumes and values are at their highest levels since 2007 and 2006, respectively, on a year-to-date basis.

Interestingly, even with the introduction of significant government incentives for first-time buyers purchasing new properties, their interest in secondhand homes remains strong. Comparing to the previous quarter, overall drawdowns have increased by over 17% in volume terms and almost 15% in value.

In September alone, there were 4,161 mortgages approved, with over 60% granted to first-time buyers and mover purchasers contributing to over 22% of the total. However, the number of mortgages approved in September experienced a decline of over 22% compared to the same time last year, and a decrease of over 8% compared to the previous month. The total value of mortgages approved in September exceeded €1.1 billion, with first-time buyers representing over 62% and mover purchasers accounting for 26%.

In conclusion, the latest figures from the BPFI highlight the robust activity among first-time buyers in the Irish housing market. Despite a decline in overall mortgage activity, particularly in remortgaging and switching, the appetite for homeownership remains strong. With government incentives and favorable market conditions, first-time buyers are taking advantage of both new and secondhand properties. As the year progresses, it will be interesting to see how these trends develop and whether they will have a lasting impact on the housing market.