Deposits are now well in excess of Central Bank guidelines
Published 20/03/2016 | 02:30
When it was reported recently that first-time buyers now have to come up with an average deposit of €51,000 to buy a home in Dublin thanks to the Central Bank's tighter lending rules, the news received a mixed reaction.
While those fortunate enough to already own their own homes might have breathed a sigh of relief that they got their mortgages in advance of the so-called 80:20 rule's introduction, prospective house hunters must have gasped in horror at the thought of how much saving they would have to do before going near their bank for a home loan.
But as bad as the figure of €51,000 from the Banking & Payments Federation sounds, it is nowhere near as grim as the reality facing those looking to buy homes in the limited number of new housing developments which are currently open for viewing in Dublin, the commuter counties of Kildare, Wicklow and Meath and beyond.
With the Central Bank now requiring first-time buyers to save deposits of 10pc on any property up to a value of €220,000 and 20pc on any excess value above this amount, the deposit required to buy a home within reach of the capital or any of the country's other main cities is substantial.
In the case of those looking to trade up or down, the Central Bank insists on a 20pc deposit on the entire value of the property for which a mortgage is being sought. While this stipulation mightn't worry buyers carrying equity from the sale of their existing homes, it could effectively prevent those who bought their first properties at the height of the boom and are still in negative equity from buying.
What follows are just four examples of the new homes currently for sale in Dublin, Kildare and Wicklow and the deposits needed by first-time buyers and those trading up or down to buy them.
Some 130 properties have been sold at Belmont in the south Dublin suburb of Stepaside since it first came to the market in 2013. A new phase of three- and four-bedroom houses recently went on the market, with prices beginning at €400,000.
Taking the mortgage deposit requirements set down by the Central Bank, a first-time buyer would need to come up with €58,000 in savings before even seeking a home loan from their bank or building society. In the case of someone moving house, the required 20pc deposit would weigh in at €80,000.
Over on Dublin's north side and near the village of Swords, prices at Millers Glen start from €264,950 and €405,000 for a three-bedroom and four-bedroom house respectively. First-time buyers looking to secure a spot at the Gannon Homes development would require a deposit of €30,990 for a three-bedroom house, or €59,000 for a four-bedroom house. Those trading up or down, meanwhile, would require a deposit of €52,990 or €81,000 depending on their preference for a three- or four-bedroom property.
Landen Park at Oldtown Demesne, near Naas in Co Kildare, currently has a range of four-bedroom houses for sale, with prices ranging from €365,000 to €525,000.
At those prices, first-time buyers looking to move in to the development would need to save a deposit of between €51,000 and €83,000 depending on the house they chose. For anyone trading up or down, the deposit required would range from €73,000 to €105,000. The sheer size of the deposits required in this case would effectively limit the prospective market to those who bought their first home prior to the peak years of the boom.
Prices at SeaGreen in Greystones, Co Wicklow, range from €395,000 for a three-bed house to €535,000 for a five-bed. Here, a first-time buyer would require a deposit of between €57,000 and €85,000, while anyone trading from their first home would need to have amassed a sum of between €79,000 and €107,000.