ESRI: Two-thirds of boom-time mortgages still in negative equity
More than 214,000 Irish homes are still worth less now than they were seven years ago, according to new research.
A new report by the Economic and Social Research Institute found that 64pc of the mortgages taken out between 2005 and 2012 are in negative equity.
In its findings, the ESRI identified mortgage holders in their early 30s as among the worst hit by the housing crash.
The institute found that those aged between 30-34 accounted for the bulk of owners of properties still worth less than the mortgages on them.
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Despite the latest evidence of some slow recovery in the property market, the ESRI report said it will take a long time for negative equity to be eroded.
“With only moderate growth in house prices expected this suggests that there is a generation of mortgage borrowers whose experience of the housing market will have been overwhelmingly negative and who will remain in negative equity for some time,” it said.
The study estimated that Irish households had lost almost €43bn in worth since 2007, adding that the housing crash had had a much broader impact than just negative equity.
“Those households still in positive equity may also be experiencing effects similar to those in negative equity due to the loss in wealth,” it said.
“For example, they may feel the need to increase savings to compensate for the decline inequity.”
Among its other findings, the ESRI report also found that there was little difference, in term of negative equity, between those first-time buyers who got assistance to buy property and those that did so without help.