It doesn’t add up: 20,000 first-time buyers chase 10,000 new homes
Twenty-thousand first-time buyers are now set to chase half as many new homes, which will drive property prices sharply upwards for the rest of this year.
New buyers and investors have been cleared to borrow for around 20,000 mortgages in the past year, according to figures from the Irish Banking and Payments Federation.
But there will be only about half of this number of new properties for sale this year.
This will leave many first-timers with no option but to compete with movers for a limited supply of second-hand homes.
Experts said the mismatch between supply and the strong demand meant property prices would keep rising amid the clamour for family homes.
New figures show that buyers have been approved to borrow almost €2bn in the first three months of the year to finance the purchase of a home.
This is almost double the amounts approved for mortgages in the first three months of last year.
The average approval amount was €214,400 in March, which was up 9pc on the year.
However, economists have dismissed fears we are witnessing a new housing bubble.
Central Bank Governor Philip Lane rejected claims the economy is on the brink of another property bubble.
He said the regulatory restriction that meant people were limited to only borrowing three-and-a-half times their income would put the brakes on price rises in the long term.
Read More: It may not be a bubble yet, but make no mistake there is trouble ahead
He said there were a number of factors driving prices up, including the lack of supply and the strength of the economy.
However, this optimism is not shared by a large part of the Irish people, as 38pc believe we are heading for another property collapse, according to the latest ‘Sunday Independent’/Kantar Millward Brown poll.
Commentators have blamed the loosening of Central Bank rules on the size of deposits first-time buyers need, and the Government’s help-to-buy rebate, for the surge in lending.
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