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House sales to first-time buyers at highest level since Celtic Tiger

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House sales to first-time buyers are at the highest level since the days of the Celtic Tiger, despite the pressures of the pandemic.

The number of mortgages drawn down by first-time buyers in the first three months of this year is at its highest level since 2007.

Up to 9,000 home loans were taken out in the first quarter.

Even when second-hand buyers are included in the figures, the overall volume of mortgages issued is at its highest since 2009. This is despite Covid-related restrictions on construction and on viewings for buyers.

It means that the buying and selling of homes is on a par with the level before the property market collapsed more than a decade ago.

Tánaiste Leo Varadkar yesterday signalled that from next month estate agents will be allowed to hold in-person home viewings again and the full return of the construction sector will take place.

However, there are clear signs of how the pandemic and the construction shutdown has impacted the market. New properties accounted for the smallest share of property purchase mortgages since 2016, according to data from the Banking and Payments Federation Ireland. New properties, which includes self-builds, made up less than a quarter of residential mortgages, down from 28.5pc in the first three months of last year. At the same time, there was a rise in mortgages taken out on second-hand homes. The strong mortgage figures are despite thousands of people being forced out of work by the lockdowns, with others having their wages subsidised.

Lenders are not approving loans for those on the PUP, and are reluctant to issue mortgages to those on the wage subsidy.

Economist with Goodbody Stockbrokers Dermot O’Leary said pandemic savings were a major factor behind the surge in drawdowns.

It meant house deposits were being gathered at a faster pace. The pandemic has also prompted people to seek out a new home due to space restrictions.

“People are in search for space due to working from home and the pandemic has been a call to arms on that.”

Mr O’Leary added most of the rise in mortgage drawdowns was for second-hand homes.

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Banking and Payments Federation chief executive Brian Hayes said the mortgage market was performing strongly considering that Level-5 Covid restrictions were in place for the first quarter of this year.

“This is in contrast to the same period last year when the market was functioning as per normal as Covid restrictions really only came into effect at the end of March 2020.”

The overall value of the mortgages drawn down was €2.14bn during the first three months of this year. First-time buyers remained the single largest segment, accounting for half of drawdowns.

There has also been a sharp rise in the numbers being approved for a mortgage, pointing to continued strong activity in the market.

A total of 4,324 mortgages were approved in March, over 50pc for first-time buyers.

This was up 16pc compared with the same month last year.


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