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Ireland home buying and mortgages: What to know in 2021

Ireland’s housing market has changed significantly during COVID-19, creating unique challenges for buyers.


Mark Solon, founder of Symmetry Financial Management, joined us recently to discuss what’s happening in Ireland’s housing market and how buyers can manage the tumultuous housing and mortgage markets.


The state of Ireland’s housing market


The coronavirus pandemic had a drastic impact on Ireland’s housing market.


Home listings dropped more than 50% in the early days of the pandemic. Overall, 2020 was the 5th worst year for Ireland home listings, with only about 50,000 properties hitting the market.

As the number of property listings shrinks, Ireland’s population continues to grow.

For the first time since 1851, Ireland is home to more than 5 million people. By 2051 Ireland’s population is expected to reach 6.6 million people.


New construction hasn’t been able to keep up with growth.

Ireland needed 250,000 new homes between 2016-2020, but less than 85,000 homes were built. This means Ireland will need 50,000 new homes each year until the year 2051 to meet demand.


Ireland housing market overview by province


Nationwide, home prices increased 9.1% in Q3 2021 compared to the same time last year as housing availability remained low.

Here is a quick overview of the housing markets in each Irish province in Q3.


Dublin


Prices dropped 0.8% on average with supply down 26% and transactions up 22%.

Leinster

Prices increased 2.6% on average with supply down 41% and transactions up 38%.


Munster


Prices increased 1.2% on average with supply down 31% and transactions up 22%.

Connacht/Ulster

Prices increased 3.1% on average with supply down 36% and transactions up 37%.


Tips for getting a mortgage in Ireland


1. Determine what type of buyer you are

You’ll likely fall into one or more of the following categories:

  • First Time Buyer

  • Second & Subsequent Buyer

  • Equity release

  • Switcher

  • Renovator

  • Self-Builder

  • Investor

  • Holiday home buyer

2. Research the market and assess your financial situation


Determine how long you’ll be able to make mortgage payments, how stable your income is, where you and your spouse are employed, how much you have saved, credit history, and any other outstanding debt.

3. Understand mortgage exemptions and exceptions

First-time buyers have different exemptions and exceptions compared to second & subsequent buyers.


For most first-time buyers, a mortgage will be capped at 3.5 times their income, but 20% of mortgages can be above that threshold. For experienced buyers, a mortgage is also capped at 3.5 times their income, but only 10% of mortgages can be above that threshold.


There are also exemptions and exceptions for minimum deposits.


Most first-time buyers need at least a 10% deposit, but 5% of mortgages can be lower. Experienced buyers need at least a 20% deposit, with 20% of mortgages can have a lower deposit.



4.Get mortgage approval in principle before looking for a property


An approval in principle gives you a clear price range for your property and helps sellers take you seriously as a buyer.

How much can you borrow?

Different types of buyers have different opportunities when it comes to borrowing money for a mortgage.


First-time buyers

These buyers can borrow up to 90% of the value of a property with a 10% minimum deposit.


Second & subsequent buyers


These buyers can borrow up to 80% of the value of a property with a 20% minimum deposit.


Investors


Personal and corporate investors can borrow up to 70% of the value of a property.


Pension investors can borrow up to 50% of the value of a property.



Want to learn more about your options? If you would like to book a virtual appointment to discuss your mortgage, or mortgages for investment properties with Symmetry Financial Management, email Mark at mark@symmetryfinancial.ie.