Irish
New Permanent tsb/ESRI home purchase study focuses on Irish First Time Buyers
By Finfacts Team
Aug 3, 2005, 12:17

  • 44% of First Time Buyers say their mortgage repayments are “no burden at all” 
  • 20% rely on gift from a parent or relative to help fund purchase with average gift size of  €15,000

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While apartments account for 16% of FTB purchases in Dublin City and County, nationally they only account for 5.4% of FTB purchased over the past two to three years
Wednesday 3rd August 2005.   20% of First Time Buyers benefit from a gift from a parent or relative to help fund their house purchases according to new research from permanent tsb and the ESRI.  The research reveals that in the case of such “gifts” the average received is €15,000.  The research also confirms that most people who have recently bought their first house are more comfortable with their mortgage repayments than had been thought.

The research was undertaken by the ESRI and used completed questionnaires from 772 first time buyers (FTBs) who took out a permanent tsb home loan over the last  3 years.

Key points include the following: 

  • FTB’s are less burdened by their mortgage repayments than expected.  Specifically over 44% of respondents indicated that their mortgage repayments did “not represent a burden at all”.  49% said that their mortgage repayments represented “somewhat of a burden” while 6.5% said that their mortgage repayments were a “heavy burden.” 
  • The average age of a first time buyer is 30 years old.  80% are younger than 34 while 10% are older than 40. 
  • 80% of FTBs contributed savings towards their first house purchase with the average saved being as high as euro23,000.  1 in 3 saved for between two and five years and 3 in 4 saved for over two years.  Approximately 20% benefited from a gift from a parent or relative with an average gift size of €15,000.   
  • In terms of house types, while apartments account for 16% of FTB purchases in Dublin City and County, nationally they only account for 5.4% of FTB purchased over the past two to three years.  The most common house type to be purchased is semi-detached (39.9%) with slightly less (36.1%) opting for detached houses.  Over 58% of FTBs said that they had purchased a “new” dwelling. 
  • The research confirms that FTB’s are typically taking out mortgages of over 20 years.  In fact over 76% took out a mortgage of over 20 years in length with 38% opting for a term of between 26 and 30 years.  Almost 75% of those surveyed opted for an initial fixed rate when taking the mortgage. 
  • Over 65% of FTBs took out a joint mortgage.  Of those that did so, nearly 97% took out the mortgage with their spouse or partner. 
  • In respect of prices paid, nearly 32% of First Time Buyers purchased a property priced between €150,000 and €200,000 [at time of purchase].  75% purchased a house priced between €100,000 and €250,000.  Looking at the situation within and outside Dublin, average prices within Dublin for FTBs were found to be €235,000 [at time of purchase].  For those outside Dublin the average price at purchase was found to be €163,000. 
  • Finally, the research shows that First Time Buyers tend to believe that moderation in house price growth will continue.  The average rate of increase forecast for the next 12 months by FTBs located IN Dublin is 8.3%.  For those located OUTSIDE Dublin, the average increase forecast is 7.9%. 

Speaking today, Niall O’Grady, Head of Marketing with permanent tsb, said that the findings draw a revealing picture of first time buyers; “In a high cost housing market, the challenge for First Time Buyers is more acute than for other sectors.  However this research suggest that FTBs are approaching these challenges with care and discipline.  The level of savings amongst FTBs is particularly significant and bodes well for the financial maturity of these people as they make one of the key financial decisions of their lives.  The findings certainly reflect well on the preparations they have taken for this first step onto the housing ladder.”

 

Download report (pdf).



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