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MANY FIRST-HOME BUYERS in Dublin will be forced to save significant sums to afford properties in the capital under new mortgage rules.
The Central Bank last night announced lending restrictions that would force property buyers to come up with a minimum 20% deposit for home purchasers.
But in response to concerns that the restriction would lock first-home buyers out of the market, it relaxed the rules for new purchasers – who would instead need to produce 10% deposits for properties worth under €220,000.
There will also be a cap on borrowers taking out loans of more than 3.5 times their annual incomes.
The decisions will be felt most strongly in the competitive Dublin market, where the average asking price for a property in the city’s north is over €282,000 – a figure which continues to rise sharply.
At that price level, purchasers taking a step onto the property ladder would need to come up with a minimum deposit of more than €34,000 and have a yearly income of nearly€71,000.
Prices have already gone up about 20% in the capital over the past year and are expected to continue their growth in 2015.
Honohan told RTÉ’s Morning Ireland that the €220,000 limit had been set because about half the properties first-home buyers had been purchasing in Dublin were below that price.
But the rules are unlikely to trouble buyers in the country’s cheapest counties, Laois and Leitrim, where the average asking prices are only €88,700 and €92,814 respectively.
Here’s what €220,000 will put you in the market for around the country:
Dublin City (north)
Average asking price: €282,899
What you can buy for €220,000: This three-bedroom apartment in Santry, Dublin 9.
The penthouse apartment spans 83 sq/m and includes a balcony and two bathrooms, while the development is close to Dublin airport and is about a 20-minute drive from the city centre.
Dublin City (south)
Average asking price: €307,337
What you can buy for €220,000: This two-bedroom apartment in Rathfarnam, Dublin 16.
The property is on the third floor of the building and comes with two double bedrooms and two bathrooms. The secure complex is not far from the M50 motorway.
Cork City
Average asking price: €182,007
What you can buy for €220,000: This three-bedroom, three bathroom duplex in Ballintemple.
According to the listing, the Temple Hill House property would “ideally suit a first-time purchaser” and includes private, off-street parking.
Co Clare
Average asking price: €130,964
What you can buy for €220,000: This four-bedroom bungalow in Doonbeg.
The house is on a 3/4-acre block a few minutes drive from the Atlantic coast and has garage space for two cars.
Co Donegal
Average asking price: €114,893
What you can buy for €220,000: This four-bedroom, four-bathroom detached house near the village of Milford.
The “ideal family home” sites on a half-acre block overlooking Mulroy Bay and the Donegal mountains.
Co Laois
Average asking price: €88,700
What you can buy for €220,000: This five-bedroom house outside Abbeyleix.
Called The Maples, the home comes with five bedrooms, two bathrooms and sits on property of about one acre 3km from Abbeyleix town centre and 19km from Portlaoise.
All average asking prices are taken from Daft.ie’s latest property report. TheJournal.ie and Daft.ie have some shareholders in common.
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Great houses down the country but not a job within fifty miles of any of them….
Unless you’re a web-based worker!
Have you seen the state of the Internet services in some parts of the country? You’d be quicker sending letters.
No broadband, so working from home is difficult. Right now govt says 2020 before rural ireland completes broadband rollout. They said 5 years in 2005, so I’ll believe it when/if that happens, personally I doubt that it will happen. All sorts of excuses will be made. Funding will not materialize and if it does, then it will be cut…
It would be great if the government went about setting up hubs throughout Ireland with high speed broadband instead of always being city centric. Jaysus it’s just a few wires that could be rolled out along side the electric wires that are existing or telephone wires. But in this country we seem to turn small problems into mountains. And these mountains then turn into financial everest’s for some reason. The reason being someone wants more fecking money. This country could be great if we didn’t have so many people trying to hold it back.
but great fresh air
When you say down the country do you mean purely outside Dublin city? You should check it out man. It’s not that bad once you get there. I’ve heard rumours of city’s in cork and Galway and other places too. Don’t take my word for it though.
Would a community based broadband programme be possible? It’s been done with water all over the country, and would only need to get to an eircom or UPC line. It might not be economically viable for them to put in the lines in sparsely populated areas, especially when areas like tallaght still have terrible service.
There are plenty of cheap property around the country if people are prepared to get their hands dirty. Why do people expect their first home to be new. The last government made the incentive for first time buyers to buy new houses instead of buying s/h which was totally wrong in my view. Now our towns and villages are full of semi-derelict properties where businesses are suffering because of this.
I am from “down the country” is a general way of saying anywhere that’s rural that is all
*correction* I am originally from “down the country” and this is only a general way of saying anywhere that’s rural – that is all. As for house prices it’s great that they are so affordable now, but it would be great to see major employers coming into the same areas where these “bargains” can be had. I suppose for people who have good jobs in the area and are looking to move away from the their rented accommodation it’s a god send.
The problem is the phrase “get on the property ladder”. Houses should be bought as a home, not a step to get in dept or so called property ladder.
Stopped reading after Dublin, why would anyone live anywhere else?
Some people have a fear of needles.
Others have a fear of tractors and find the smell of silage nauseating.
Love the smell of fresh silage ..
Silage generally doesn’t smell. It’s fermented grass after all.
What does smelly is slurry.
– Diarmaid O’Fionnachta
Culchie
Because Dublin is full of people who are full of s@@t like yourself..I for one am glad I don’t live in that overpriced dump, much more down to earth people live in the country and smaller cities of Ireland
…because some people don’t want to spend their lives sitting in Traffic…
Drove through dublin monday around 6 pm, what a badly planned city you live in, its like being back in the 69′s no traffic planning at all
Lower property prices outside Dublin means one thing. Decentralization.
No, it means property prices in Dublin will have to drop to reasonable levels or development of apartment blocks intended for rental will need to be built. Very few will be able to sell their house in Dublin for extortionate prices any more.
That is nonsense, not everyone wants to live in Dublin or urban areas.
It’s about time the rules got strict. If you can’t afford it then you just can’t buy it. Simples.
Trevor , itreally isn’t about time. These new rules are exactly what builng societies imposed on themselves in the 1970s. Then they got greedy.
Government forgets motorways run both ways .move some services out of the cities and use the motorways.
Why on earth does a three bedroom house require three bathrooms?
A lot of Indian food?
Clearly a need to rebalance the economy, maybe by moving a lot if admin jobs in public and private sector to midlands.
Moving public sector jobs outside of the capital never works. The French tried relocating government jobs outside of Paris and it failed miserably. Very few government jobs going in Amsterdam yet it’s still the most populous city in the Netherlands.
Even moving some of the departments outside of Dublin to promote decentralisation failed in Ireland.
Sad to say but only the landlords are winning. They have the market cornered and their greed caused the initial problem. All development land in and near Dublin is completely bought out and is being banked for a market improvement.
Landlords didn’t cause the initial problem, Ireland’s obsession with owning property combined with unregulated lending and a global crash occurring at the same time caused it.
There’s absolutely nothing wrong with renting as long as you rent from a respectable leasing group.
You can put the greed in a number of areas starting with the last government for not protecting citizens while applying ridiculous stamp duty charges to s/h property. You can blame developers and people selling building sites at a ridiculous inflated price. Then you can blame solicitors and estate agents for charging a percentage of the sale price for doing the minimal amount of work regardless of how much the property sells for instead of a fixed fee.
Until the government can sort these things out we can expect the property bubble to grow again and the greed continuing.
Obsession with property ownership led to landlordism. Unregulated lending or market economy is what led to banking competition which everyone in Ireland wanted as in their view the previous Pillar banks AIB BoI and Ulster bank were too confining. With competition came cheaper interest and competitive growth. Add fuel to the fire then with brokers / auctioneers gazumping and inflating incomes in credit applications all to drive a commission frenzy. No one cause. Nothing wrong with renting as you say but our constitution is built around property ownership with no rights afforded to the tenant. Since the Famine our psyche has been to own and not be second class at the hands off landlords. Yet again those with property and cash are buying up all the development land in Dublin getting ready for yet another “scarcity of property” inflation. Even Honohan( CB Governor) admits that Irish property is amongst the dearest in Europe. Hard to believe as we are the least populated?
First time buyers can still purchase houses for more than 220,000, not sure why there’s seems to be a perception that this is some kind of new limit.
Asking prices are aspirational, thejournal should do a follow up article to this in 12 months based on property price register actual selling prices. I doubt there’ll have been too much movement of the 500,000 euro terraced houses in need of full refurbishment which are currently on the market.
That has been tried before Sean, the fact is that estate agents don’t like people to know what the real selling price is. We need an independent agency like Zoopla to monitor sales around the country and to feed advice to the consumer.
I could sell you a mansion for € 220.000
The new regulations will make a minimal difference.
Most first time buyers will purchase up to €220,000 depending on where they live.
People who are second time buyers ( mover uppers) will have at least 20% available from the sale of the first house. (Presuming if one is moving upwards they have sufficient to do so).
Those in negative equity but still able to service their mortgage mostly will not move.
The cash buyer to let will be best placed to purchase because not being mortgage bound he/she will not be effected by the 30% requirement.
Nothing is done for the owners in arrears. These fall under two categories. Those whose family homes are in mortgage arrears and those who borrowed in order to buy to rent.
Those whose family homes are in arrears should be helped by way of debt write down.
The buy to let people undertook a commercial risk and should be enabled to allocate the rent payments in total towards the repayments of the loans. If they do not do so then the buy to let properties should be repossessed and sold thus possibly enabling first time buyers to purchase at a reasonable price.
At the end of all each and every property is owned by someone. The danger is in concentrating the ownership of more properties in the hands of a lesser wealthier few and leaving an ever decreasing possibility of people who want to purchase being able to purchase.
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