A few short years ago, the majority of new home buyers in Ireland were settling in to toast to their new home before their 30th birthday. Today, the average age of a first-time homebuyer in Ireland is 34 – a group that can be classically defined as “thirty-somethings.”
The press has called it Ireland’s “housing crisis.” This is the oldest that first time home buyers have ever been in Ireland’s recorded history. And maybe most surprisingly, the jump in first time home buyer age has happened in just the last 6 years, changing drastically – from age 29 in 2006 to age 34 earlier this year.
This news probably comes as no surprise if you live in or around Dublin. The average price of a 3-bedroom home in the city and county of Dublin now hovers around €334,000. And although prices may not be quite this high across the country, many twenty-somethings are finding that two incomes are still not enough to make their lifelong dreams of a fireplace and a cozy den a reality.
Tighter Restrictions for Buyers
Climbing home prices are certainly one barrier to young people buying homes, but they’re not the only issue. The Central Bank recently updated guidelines for buyers that are making it much more challenging for younger people to get their foot on the property ladder.
Under the Central Bank’s rules, most buyers will need a 20% down payment to purchase a home. Lucky for first-time home buyers, they only need 10% needed for the first €220,000 of their loan (and 20% thereafter). But most young people today find even that is asking too much – and that they have to lean on the graces of their family and friends to even get them a seat at the home-owning table.
All of this has led to those under thirty being all but priced out of the market for homes priced above €160,000. Some reports are saying that the current housing landscape and today’s housing prices will have even more dire consequences for the next generation of home buyers. Instead of pricing a few people out of a few markets, an entire set of young Irish people are being priced out of owning a property every day.
It may sound bleak, but it’s not all bad news – there is hope for young people who would like to purchase and own a home in Ireland.
Ireland’s Help to Buy Scheme
First of all, help is on the way for younger homebuyers in the form of the Help to Buy scheme. The Help to Buy Scheme is a government assistance program that brings the initial upfrontdeposit needed to purchase a new home down to 5% for new buyers. Even better than the lower down payment is the fact that those who take advantage of the scheme pay no interest for the first five years of the loan.
Supporting Dreams of Home Ownership
The Help to Buy Scheme will undoubtedly go a long way in helping first time home buyers of any age to get into their first home. And the benefit to the country’s twenty- and thirty-something population will be incredible.
With a lower upfront cost, many young people will be able to secure a loan and afford their payments without the help of family and friends. Many will be able to afford a home that they can raise their families in, that they can stay in for years to come. These young professionals and families will achieve their dreams of owning a home.