Dublin Borrowers Driving First-Time Buyer Mortgage Surge in Neighbouring Counties, Reveals Latest BPFI Report

Friday, 14th June 2023 – The recent Mortgage Market Profile Report for H2 2023, published today by the Banking & Payments Federation Ireland (BPFI), unveils notable trends in the mortgage landscape, with Dublin borrowers playing a disproportionate role in first-time buyer (FTB) mortgage activities in Kildare, Wicklow, and Meath.

In a striking revelation, Dublin residents accounted for over 40% of FTB mortgages in these three counties, with a significant proportion specifically allocated to new semi-detached or terraced houses. The figures ranged from 55% in Meath to a notable 60% in Kildare. This migration pattern highlights the pressure on Dublin’s housing market and the expanding search radius of first-time buyers.

Cross-County Buying on the Rise

The BPFI report indicates that on a national scale, one in four FTB mortgage borrowers now purchase or build their first homes outside their home counties, increasing from 19% to 24% between 2021 and 2023. This trend is most pronounced in Leinster, where at least half of the FTBs are cross-county borrowers.

Kildare, Meath, Laois, and Wicklow exhibit the highest influx of non-local FTB borrowers, with the proportion of local borrowers in these counties falling below half. Specifically, FTBs from outside their home counties accounted for 41-46% of the mortgages in these regions.

Regional Mortgage Dynamics

The report provides a  breakdown of regional mortgage activities, highlighting Dublin’s dominance with 31.3% of the national home purchase mortgages. Following Dublin, Cork stands as the second-largest mortgage market with 11.7%, while Kildare follows closely at 8.3%.

In Wicklow, the property value for those with a mortgage to move property surged by 7% year-on-year to €560,000, marking it as the second highest median property value after Dublin. Galway showed the highest year-on-year increase in median property value for all customer segments, with a 19% rise for FTB mortgages on new properties, reaching €417,000.

Limerick emerged as the county with the largest share of home mortgages going to FTBs buying existing properties, with 60% of the mortgages in this category.

Help to Buy and First Home Scheme Impact

Brian Hayes, Chief Executive of BPFI, commented on the significant role of government schemes in shaping these trends. “Given the impact of Help to Buy and the First Home Scheme in incentivising FTBs to buy or build new properties, it’s notable that Kildare, Meath, Laois, and Wicklow accounted for about 35% of Help to Buy claims in 2023. This reflects the importance of these counties in the supply of new housing for purchase, with some 31% of new scheme house completions in 2023 according to the Central Statistics Office (CSO).”

Detailed Findings and Economic Implications

The report outlines several key findings:

  • FTB Mortgage Drawdowns: The number of FTB mortgage drawdowns rose by 1.6% in 2023, totalling nearly 26,000, with the value increasing to over €7.2 billion—the highest since 2007. FTB mortgages on existing properties rose slightly by 0.3% to 16,985, while those for new properties increased by 4.2% to 8,606.
  • Dublin’s Influence: Dublin borrowers accounted for 40.4% of FTB mortgages nationally, with their influence extending across eleven other counties from Cavan to Wexford. Dublin borrowers were responsible for 49%, 44%, and 43% of FTB mortgages in Kildare, Wicklow, and Meath, respectively.
  • Income and Loan Values: The median basic household income for FTBs buying existing properties rose to €76,000, while for new properties it was about €90,000. The median loan and property values also saw significant increases, particularly in the FTB Existing segment.

These statistics reflect the availability of housing stock, both newly-built and second-hand homes, in each region, with FTBs in particular flocking to new developments within the commuter belt of the capital. This trend is driven in part by remote working trends and government incentives.

For further insights and detailed statistics, the full BPFI Mortgage Market Profile Report H2 2023 is available on their official website.