Almost €210m of the money used to fund deposits on home purchases in the first six months of this year was given to homebuyers as a gift.
New figures from the Banking and Payments Federation of Ireland (BPFI) show that the median deposit for first-time buyers was €52,100.
The median deposit for a mover purchaser was €135,000.
The ongoing surge in house prices is thought to be behind the rising deposit sizes.
While some 96% of first-time buyers put their own savings towards the deposit, nearly 42% also turned to the ‘bank of mum and dad’ to fund it.
The BPFI said just over €149m was gifted to first-time buyers for deposits while €60.4m was gifted to mover purchasers.
'Bank of mum and dad'
On Breakfast Business this morning, BPFI CEO Brian Hayes said a large chunk of people’s deposits are coming from gifts and family loans.
“It is a combination of significant savings for people as they get older – and we know from our own stats that the average age that people are buying their first house is growing and growing,” he said.
“But it also comes from the bank of mum and dad who are also contributing to the deposit to allow people to get on the housing market.”
House prices
He said the surge in house prices is driving the increase in deposit sizes – but insisted there is some light at the end of the tunnel.
“I think there is some good news for first-time buyers however in terms of the number of new starts and the number of new completions this year,” he said.
“The pipeline of new housing developments for next year would lead us to the conclusion that about 27,000 new starts will be the number next year.
“So, we have to deal with supply. That is the fundamental problem we face.”
Loans
Property District CEO Carol Tallon told Newstalk Breakfast that some people are paying back the money they get from their parents.
“The reality is that some of these are absolutely not gifts and the homebuyers in questions are in fact repaying family members,” she said,
“So, they are informal loans in a lot of cases adding to the outgoings of the home-buyer.”
The BPFI said the amount of money coming from home-buyers personal savings was almost four times that of gifts – totalling around €795m.
Residential property prices around the country increased by 12.4% in the year to September.
Average prices increased by 11.5% in Dublin and 13.2% outside Dublin.
Meanwhile, National average rents are now more than one-third higher than their previous peak in 2008.
