Irish Mortgage Approvals Surge as First-Time Buyers Move Ahead Despite High House Prices

Dublin: Instead of waiting for house prices to fall, increasing numbers of Irish families appear to be entering the housing market as soon as they can afford to, with mortgage approvals reaching one of their strongest levels on record in July.

A total of 6,253 mortgages were approved during the month, according to the Banking and Payments Federation Ireland (BPFI). Of these, 3,575, or 57.2%, were for first-time buyers. Overall approvals were 14.4% higher than in July last year, while the total value of mortgages approved exceeded €2.037 billion, the first time the monthly figure has crossed the €2 billion mark.

Mortgage approvals for first-time buyers were worth approximately €1.18 billion. A further 1,255 approvals were for people moving from one home to another.

The figures suggest that first-time buyers remain a major force in Ireland’s housing market.

Are buyers expecting house prices to fall?

Current data does not support the idea that buyers are taking out mortgages because they expect a major fall in property prices.

House-price growth has slowed considerably, but prices themselves continue to rise. National residential property prices increased by 5.6% in the year to June, with prices rising 4.6% in Dublin and 6.4% outside Dublin. The national median house price has reached approximately €396,000.

The annual rate of growth has fallen from around 10.1% in August 2024 to 5.6% now. That represents a slowdown in the rate of increase, rather than a decline in house prices.

For some buyers, this creates a different calculation. A home costing €400,000 today would cost €420,000 if prices increased by another 5% over the next year. For households already struggling with affordability, waiting for a significant price reduction may therefore seem risky.

Housing supply remains the central problem

Ireland continues to face a shortage of homes relative to demand.

Financial institutions expect approximately 38,500 to 40,000 homes to be completed in 2026. However, research from the Economic and Social Research Institute suggests that housing supply is likely to remain below underlying demand for several years.

This means that even if construction increases, the shortage is unlikely to disappear immediately.

For prospective buyers, the lack of supply means there is no guarantee that waiting will result in a cheaper property. In some circumstances, continued price increases could make home ownership even more difficult.

Rents are also pushing people towards home ownership

High rents are another factor encouraging financially secure households to consider buying.

The latest available figures put the average monthly rent for new tenancies at approximately €1,755, compared with €1,503 for existing tenancies. New rents have risen by around 5% over the past year.

In Dublin and surrounding counties, rents for two-bedroom properties can be considerably higher.

For couples paying €2,000 or more each month in rent, the prospect of directing a similar amount towards a mortgage can make purchasing a home increasingly attractive—provided they can meet the deposit, lending and affordability requirements.

Interest rates are not the whole story

Mortgage rates have eased somewhat compared with last year. The average interest rate on new home loans was 3.49% in June, 0.11 percentage points lower than a year earlier. About 93% of new mortgages were fixed-rate loans.

However, buyers should not assume that borrowing costs will continue to fall indefinitely.

For many households, securing mortgage approval provides certainty about their borrowing capacity and allows them to act when a suitable property becomes available, rather than waiting for a major interest-rate reduction.

Refinancing is also driving mortgage activity

The July figures should not be interpreted as representing 6,253 new homebuyers.

Mortgage activity also includes homeowners switching lenders or refinancing existing loans.

The number of mortgages involving the transfer or refinancing of existing home loans increased by 71.6% year-on-year, while the value of those loans rose by 81.1%.

This suggests that many existing homeowners are attempting to secure better rates before their current fixed-rate arrangements expire.

Government schemes are supporting first-time buyers

State assistance is also helping some households enter the market.

Eligible first-time buyers purchasing new homes can receive up to €30,000 through the Help to Buy scheme, with the current maximum available until the end of 2029.

The First Home Scheme can also help eligible buyers bridge part of the gap between their mortgage capacity and the price of a property.

New and self-built homes accounted for 38.6% of mortgages taken out for home purchases in the second quarter of 2026, while first-time-buyer mortgages for new homes increased by 13.4% year-on-year.

Two incomes increasingly important

The housing market is also becoming increasingly difficult for single-income households.

The median income of homebuyers in 2024 was approximately €84,400, while the median income for two people purchasing a home together was €101,200. More than 60% of homes purchased were bought jointly.

The median house price was 3.85 times the median buyer income in 2019. By 2024, that ratio had risen to 4.2 times. For buyers under 35, the average purchase price was around five times their income.

These figures underline the growing importance of dual incomes when trying to secure a mortgage.

Are immigrants, including Indians, entering the market?

There are signs that established migrant communities are increasingly moving from renting to home ownership, particularly among professionals working in healthcare, information technology, finance, pharmaceuticals and engineering.

However, the available statistics do not support claims that one particular immigrant community is responsible for Ireland’s house-price pressures.

Foreign nationals accounted for approximately 16.8% of Ireland’s population in April 2026, according to the latest CSO figures.

For many migrants who have lived and worked in Ireland for several years, obtained stable employment and established long-term plans, purchasing a home can naturally become the next step after years of renting.

The situation is different for recent arrivals. Census data indicates that approximately 80% of households headed by foreign nationals within their first year in Ireland lived in private rented accommodation.

Today’s renters could become tomorrow’s buyers

The longer-term housing impact of migration may therefore be more significant than the immediate effect.

Thousands of healthcare workers, IT professionals, engineers and other skilled workers who currently rent may eventually become first-time buyers as their employment, residency and family circumstances become more established.

If housing construction does not keep pace with population growth and the number of people entering the workforce, demand for homes—and pressure on prices—could remain elevated.

Will house prices fall soon?

There is currently little evidence of a major nationwide price correction.

The slowdown in annual price growth is positive news for buyers, but several factors continue to support the market: limited housing supply, population growth, strong employment, the purchasing power of two-income households and government support for first-time buyers.

The July mortgage figures therefore tell a broader story. Many prospective homeowners appear to be moving away from the strategy of waiting for house prices to fall and towards buying when their finances allow.

But mortgage approval is only the first step. The more fundamental issue remains the shortage of homes.

If mortgage approvals continue to rise while the supply of properties remains constrained, more buyers could end up competing for the same limited pool of homes—potentially keeping upward pressure on prices.

Irish Samachar English News