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ACCORDING TO THE latest DAFT property index, the average asking price for a home in Ireland is now just over €320,000. That makes the average repayment on a 90% mortgage around €1,300 a month much cheaper than the average rent of €1,721 and theoretically within the reach of the typical renter.
The catch? To buy that home, you will also need to find a deposit of €32,000, pretty much impossible to do when you are paying so much on rent.
For those unable to rely on the ‘bank of mum and dad’ the way around this is to use the Help to Buy scheme to fund the required 10% down payment.
However, the scheme only applies to new build properties which are €87,000 more expensive than average at €407,000 according to the same report. Making the mortgage required too large for many would-be First Time Buyers.
This is where the other big housing support, the First Home Scheme should come into play, launched in July 2022 it provides First Time Buyers additional finance for new builds through a shared equity plan.
When used with Help to Buy it gives First Time Buyers a further 20% of the purchase price upfront, in return for the scheme getting the same share of your home when you sell at an ultra low fixed interest rate of under 2% per year on average.
On a new build of €407,000 a buyer could therefore get most of their deposit of 10% funded through Help to Buy (€30,000) and then 20% (€81,400) from the First Home Scheme, leaving €10,700 from savings and €284,900 to be funded through a mortgage.
Including the average interest on the equity, the total repayments in this example would be €1,350 a month, only around €40 a month more than if the First Time Buyer had bought a non new build property for €320,000. If you want to work out your own budget you can use a mortgage calculator to work out your buying options or a mortgage repayment calculator to work out what your repayments would be.
Crucially though, with the new build, instead of forking out €32,000 you only need to find €10,700 for the deposit in this example thanks to the Help to Buy scheme. The First Home Scheme is based on a successful UK scheme introduced in 2013 and used with the Help to Buy Scheme has huge potential to free trapped renters by helping households who can’t access additional funds from family. Based on the UK numbers, the scheme could help over 30,000 Irish households to get on the property ladder. To date though only 1,255 homes have been purchased with the scheme, with 7,530 applying.
Some of the low take up so far is due to the lack of understanding of the scheme, but the biggest issue by far is the property price ceilings currently imposed by the scheme.
In Dublin for example the scheme can only be used to purchase properties for less than €495,000, but the vast majority of Dublin’s new builds are already considerably more expensive than that according to the same Daft.ie report.
The worry in Government circles is that without caps limiting the availability of the scheme new build house prices will rise even further.
They will, but that shouldn’t matter, as those houses are still more affordable due to the subsidies being available. It’s whether houses are affordable after the subsidies that matters, not whether house prices seem high or low.
Contrary to what many think, developers aren’t making super profits on new housing developments right now, as costs have shot up in the last few years. That’s why housing construction and supply are so limited. Higher new build prices will therefore stimulate supply by making developing more profitable and help fix the root cause of our housing crisis, supply.
Politicians and policymakers are paranoid about high house prices and the negative headlines that come with them, but that’s the tail wagging the dog. What they should worry about instead is expanding housing affordability.
The Help to Buy and First Home Scheme have huge potential to help us fix both housing supply long term and help trapped renters in the short term if we have the courage to lift the current caps.
Mark Coan is Founder of Online Financial Guide moneysherpa.ie.
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Folks spend too much time schoolin’. All anybody needs to know is that Merica is undefeated in world wars and 50 stars + 13 bars = Merica.
School is irrelevant to the most popular trades,I have never uses French, Irish ,biology,physics,religion,they were forced as no other options.
The ones I do need and to a considerable degree maths, mechanical engineering,carpentry.
I wanted to do business but the class was full(most anoying some never turned up).
Pe was a waste of time anyone who didn’t want to go had 80min wasted.
The education system is a joke its a revolving door system.
The guidance cllr said I would be best suited to “a vet because I had a liking of animals” I since have got a business degree and run 2 small steady businesses not that I have a 50k merc or mansion.
Over half what I done in school is beyond useless
So we should give up the other subjects and the whole country should do the same job as you Eric? I use business, economics and accounting in my job, my mates jobs range from lab scientists (physics), doctors and vets (biology), personal trainers (PE) to a document translator (Irish). There’s more to making the world go round than just what you do.
@amy you missed my point all subjects are not suited to everyone..I know guys who wanted to be carpenter’s but were told to do the leaving insted of leaving at 16 for a apprenticeship and saving 4yrs
@ Eric
To be fair, those mates of yours who wanted to be carpenters would probably be unemployed now and find it much harder to secure non-carpentry work without the Leaving Cert. It might not be fair but it’s the reality.
@chris,one working for himself and 2 lads working for him.two others still work for the same guys.
Leaving is useless in trade work if I was hiring a carpenter and had a choice of 2x 24yr olds one fresh from college papers to beat the band or a guy who started his apprenticeship at 16 and qualified at 20 with 4yrs qualified to date exp,IL take the guy that’s over all has most hands on experience the guy with the degree has no exp closing all doors bar jobs that need no qualifications
The leaving absolutely is not useless in trade work. Maths for example is essential in nearly all trade work, and geography in some. Your friends are the lucky ones I know a carpenter and a plumber who lost their jobs and had to retrain. One had the leaving and so got straight into college doing sound engineering, the other had no leaving and went to work in a shop and has to claw his way up the ladder. Kids have no idea as young teenagers what they want to go on to do as adults, that’s why there is a variety of subjects to help them decide which they prefer to train in as they come into adulthood. It also makes for more rounded individuals who aren’t completely ignorant of all other professions and a certain amount of life knowledge. That’s what school is for. College and apprenticeships are for the intensive career training.
@amy.maths is part of a apprenticeship anyway..I never mentioned geography but it wasn’t on offer to me and I don’t know a carpenter,plumber,electrician,or other trade that need geography
Geography isn’t just about which town is where. It’s also about types of soil, lay of the land, aerial locationing, (site analysis) all of which need to be taken into account in any large scale building project. Pipes are laid underground. Electric lines can’t go through lakes. A house cant be built on marshland. And so on.
@amy,that is true but they are specialist jobs for architects and engineers so my point still stands to the jobs I mentioned first,by your logic I could bring meteorology into the conversation and say well every needs to know the weather
As is quite evident from your post.
Eric,
If you’re looking for a carpenter and have a choice between a carpenter and someone who isn’t a carpenter, it’s a bit if a no-brainer.
They didn’t teach me that in pass maths
You are mixing up your pluses and minuses. The sum is 30 = 25 + 3 +2. What missing 1?
@ben They give 10€ each.. 3 by 10 = 30.. They get it for 25€ so there is 5€ change they take 1€ each back out of the change so then there’s 2€ left .. If they gave 10€ and got 1€ back that means they paid 9€ each 3 by 9 = 27+2 = 29 in any language
Stop messing about. The 2 has to be subtracted from 25, not added to it.
Number 3 is not the Fundamental Theorem of Calculus, but the definition of the derivative in terms of difference quotients. The Fundamental Theorem of Calculus relates derivatives to integrals (or, if you prefer, rates of change to areas under curves).
We’ll take you at your word on that one ;-)
Niall Madden is correct. The formula shown is very important, and could be on this list on its own merits, but it is not the Fundamental Theorem of Calculus.
Great article.
What about Boyles law PV/t is a constant
@Eddie, ‘fraid not mate, the €30 ceased to exist when they got back the fiver, meaning the merchant recieved €25. So we have 3x €9 = €27 less the €2 in hand equals the €25 taken by the merchant.
Isn’t pleasantly surreal to be arguing about algebra at Sunday lunchtime?
@ Ben are ya hungover whahaha
@Eddie, hungover! never. Maybe a bit secondhand……..
I think the formula was pressure is proportional to the reciprocal of the volume. Charle’s Law brought in Temperature into the equation later.
The more complex the mathematics, the less numbers are involved. :-/
Now I get it !!!
3 house mates were going to by a radio between them, it cost 30€ so they gave 10€ each, the shop keeper said I will give it to ye for 25€ so there was 5€ in change they each took 1€ then there was 2€ left right , so really they only paid 9€ each cos they give 10 and got 1 back each so 3 times 9 = 27 + the 2 that was left over from the 5 change = 29
Where’s the missing 1€????
It was put in the tip jar as a kind gesture as thanks for the €5 discount ;)
I’d forgotten about BOMDAS.
I’m still working on a formula to find out how long is a piece of string
I still can’t find X
What about all of murphys laws???
Should be compulsory for teachers to introduce secondary school maths with this article/book digest. Might make a few more people appreciative of the usefulness of maths.
That’s what ‘Project Maths’ is about – making Maths real, eg. finding the height of a cliff by walking away from it (rather than the length of 1 side of a triangle).
Great article.
What about Boyle’s Law? Robert Boyle, Irishman and the father of chemistry? There should be 18 laws listed!
Not THAT important compared to those listed. Great experiment proving it in LC Physics though.
Black = White
Quadratic equations ruined by life. x=-b plus or minus the square root of b squared minus four ac divided by twice a. I hate you all.
Whats sad about our education system is that I DO remember this equation 25 years on, but could not remember what it was for (or even if our teachers told us).
That’s the major problem I have with math lessons, they teach the formulae, but no context within which I can be used.
http://www.udacity.com have a great introduction to physics course (free), they show you how to calculate the height of a building, the distance from the earth to the sun, or how to aim a cannon at attacking pirates, using trigonometry. fun course.
*No context in which IT can be used.
It’s how you get the solutions to a quadratic equation (one where the highest power of x is 2) when it can’t be factorised..
It’s how you get the solutions to a quadratic equation (one where the highest power of x is 2) when it can’t be factorised..
Yuck algebra!!!
Great article…
Equation 9 (The Fourier Transform) is printed incorrectly.
There should NOT be a minus sign in front of the top infinity symbol.
(That is the top sideways ” figure 8″).
As printed the equation is meaningless.
Not completely meaningless; the RHS of int(f(x),a,a) is just zero….
Think the Black Scoles model is the one the A beautiful mind is loosely based.
Different mathematician, read up on John Nash.
Dont need to buy the book now!!!
Ewwwwww hate maths
Number 6 Euler’s formula for polyhedra only applies to convex polyhedra
Huh?
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