CBoI runs the rule over "difficulty" in saving for deposits

The Central Bank of Ireland has done some research on just how difficult it is for first time buyers to accumulate the necessary deposit, thus demonstrating personal monetary rectitude, in order to qualify for a mortgage under the Banks guidelines.

The full report is available from here

centralbank.ie/publications/ … posits.pdf

Based a couple with no children, currently renting, using real world data including incomes across regions, published asking prices for 3 bed houses and rental rates along with expenditure based on work by The Insolvency Service of Ireland, the findings will make sobering reading for those suggesting the current Central Bank provisions are in any way onerous.

That said, two demographic items to keep in mind;

The age of the average FTB has moved up to 34 in 2016 from 29 in 2006.
irishtimes.com/business/econ … -1.2675430

In the period 2005 to 2015 (latest set available), according to the CSO, the age of the average first time mother increased from 28 to 30.7 years and the most common age moved from 31 to 32.5. While total number of births p.a. across the decade increase from 61,000 to 65,000, the number of first births, having spiked towards the centre of the range has remained flat at about 25,000 p.a.

Blue Horseshoe

A couple, no kids and the incomes/rents quoted. It’s all a bit best case scenario, particularly the incomes.

A link to a slightly related article broadsheet.ie/2016/10/04/myt … ed-middle/

“They” won’t read it or simply ignore it.

When have facts ever mattered to those that want to push an agenda?

Thankfully we have a central bank that does take the time to consider facts and for the most part appears properly independent from Gov and popular opinion.

Does a couple with no children need a 3 bed house as their very first purchase, unless they’re imminently expecting non-identical twins of opposite sexes?

Coles2 remarked on this on another thread. There’s no longer any distinction between a “starter” home and a “forever” home. The Irish dream is a 3 bed semi in suburbia, with 1.9 children, a Hyundai Santa Fe on a front garden that’s been converted to a gravel car park and a back garden that’s all decking and mower-friendly ryegrass and no biodiversity, while the Irish starter home is a 3 bed semi in suburbia, with room for a projected 1.9 children, a Hyundai i10 on a front garden that’s been converted to a gravel car park and a back garden that’s all decking and mower-friendly ryegrass and no biodiversity…
This is fine if you never intend or expect to trade up (except for the car), but it seems that most people do want to trade up, though to what (except a bigger car), we’ve no idea, so there seems to be some kind of logical disconnect going on (or maybe, it being disconnected, not going on).

This point has been made on the pin a few times.

In large parts of Ireland an apartment is within reach of someone working full-time in a supermarket with a prudent lifestyle and several years of saving.

Those who aspire to red brick and an even postcode in Dublin have to have different aspirations.

The CB 20% deposit rule doesn’t help keep prices down, it just protects the banks’ exposure, and makes it difficult for FTBers. Keep the income multiple rule, but relax the deposit one.


20% for FTBers my hole.

It’s quite possible to buy somewhere adequate with 10% (11%, 12%…) down and you know it.

If you’re going to spin put a bit more effort in.

The problem with this line of thinking is that is tends to ignore the consequences if a large number of people actually follow the advice given.

In case you’ve forgotten, the Irish economy is addicted to consumer spending by people aged between 25 and 35.

If even half of couples were to follow thus advice, and slash their spending as suggested, there would be a recession comparable to 2009.

There are no plausible ways to get a significant number of people to up their savings sufficiently to gather a deposit in 5 years without a catastrophic result for the economy and tax receipts.

So if the “solution” of everyone turning into Scrooge for 5 years is enacted, we get another collapse and lost decade. The “savings” will then be eliminated by the resulting bail-in.

Here, courtesy of the OECD is an interesting finding on the upcoming FTB chohrt;

From the Irish Times, 5th Oct;


](Ireland has highest rate of 15-29 year olds on benefits in OECD – The Irish Times)

That’s going to dampen the demand side somewhat.

Blue Horseshoe

21 years to save for a deposit in Dublin as housing crisis deepens

irishtimes.com/business/per … -1.3478914

Their assumptions are poor:

renting a 1,500 1-bed apt in Dublin (why not house share for 600?);
avg wage of 36K (fair enough);
leaving savings of 127 a month (so 30 a week? why even work then? Go on dole, rent allowance, free council house inside 21 years)

Aye, the lad who wrote that was on Claire Byrne Live last night. Once I heard the 1,500 rent for a 1 bed apt piece, I knew it was a poorly laid out thesis

I heard this guy on the radio.
Was screaming at him in my car.
His assumptions were verbal clickbait.


The average wage of €36k is irrelevant, as with anywhere in the world, it takes a full-time worker to own a property.
Try and get a mortgage with only a part-time job !

Even taking this glaring problem into account, comparing ***Ireland’s ***Average Wage with ***Dublin’s ***Average Property Price is not like-for-like at all.

People in Dublin get paid more, reflecting the higher expense of living there (although you could argue, not reflective enough).

He needs to compare Dublin’s average full time wage with Dublin’s average 1st time buyer/starter home.

His analysis was just plain lazy.

According to CSO Price Index, prices are currently around the same as Sep 2005. They peaked in April 2007.

So “House prices could fall over next two to three years” isn’t beyond the realms of possiblity