New home buyers spend 25pc of wages on mortgage
New home buyers are spending a quarter of their income to service their mortgages due to high house prices.
Research from the Central Bank shows that large numbers are also being forced to get exemptions from strict lending rules to allow them to buy.
Borrowers in Dublin and its surrounding counties are maxing out on what they are allowed to borrow.
These buyers typically are getting a lending exemption and have a household income of between €70,000 and €80,000, according to a number of research reports issued by economists at the Central Bank.
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Overall, one in five new buyers are borrowing at the limit of what is allowed under the lending rules.
The studies found the average first-time buyer drawing a mortgage this year is spending a quarter of their net income on monthly repayments.
This is considered high by mortgage experts, but is below the 40pc of income that had to be put aside to meet repayments during the housing boom in 2008.
The findings of the four research reports appear to conclude that the lending limits are working to ensure people do not over-borrow and banks do not end up over- exposed to high-risk lending.
Earlier this week Central Bank Governor Gabriel Makhlouf made it clear he is to withstand pressure for any major relaxation of the controversial mortgage lending limits. He said the rules are now "a permanent feature of the mortgage market".
Taoiseach Leo Varadkar and AIB boss Colin Hunt are among those who have been calling for the rules to be relaxed.
The rules are currently being reviewed, something the Central Bank does every year.
Under the rules borrowers must have a deposit of at least 10pc of the property's value, with 20pc for other buyers. All buyers are restricted to borrowing no more than three-and-a-half times their income.
The four research papers also found that first-time buyers are less likely to default than those buying for the second and subsequent time.
The paper on this concluded that this justified first-time buyers only needing a deposit of at least 10pc, with other buyers needing a 20pc deposit.
The research was undertaken by Central Bank economists to look at the impact they are having on new buyers.
Rising house prices mean that the lending limits have increasingly become an issue for borrowers, the researchers found.
It was found that 20pc of borrowers are having to seek a mortgage amount that is at the limit of what borrowers are permitted to take on, based on the limits.
Property prices nationally have increased by 85pc from their trough in early 2013. Dublin residential property prices have risen 95pc from their February 2012 low.