There is no doubting that there is huge demand for mortgages out there and that the banks are keen to lend.
Quarter after quarter, first-time buyers - traditionally the most active cohort in the market - account for ever-increasing volumes of mortgage drawdowns at ever-increasing values, both individually and collectively.
But an analysis of the figures shows that mortgage lending activity here is stuck at 1980s levels.
Lack of supply of properties is a big contributor, as is competition for those scarce units, but there is also an affordability issue, which is locking droves of aspirant house purchasers out of the market.
Buoyant market
The Banking & Payments Federation of Ireland (BPFI) produces quarterly updates on the mortgage market.
While the figures have been showing declining overall activity of late, that is mainly accounted for by a falloff in the number of people switching mortgage providers, which they did in their droves as the European Central Bank moved to raise interest rates in 2022.
Perhaps a more reliable measure of buoyancy in the market right now is first-time buyer activity.
The figures here show mortgage lending back at 'Celtic Tiger' levels.
Figures for 2023, published in recent days by the BPFI, showed first-time buyer activity at the highest since 2007 with over 25,500 drawdowns by that cohort alone at a value of €7.2 billion.
The average first-time buyer mortgage is growing all the time and increased by almost €20,000 year on year to over €282,000.
1980s lending levels
It all conveys the impression of a market that is operating at full tilt, but in fact, mortgage lending activity remains at levels seen four decades ago, despite massive growth in the population and in earnings in the meantime.
Based on an analysis of mortgage market activity, Frank Conway, founder of the financial education website, MoneyWhizz, calculated that full year lending for house purchase stood at fewer than 36,000 mortgage drawdowns for 2023.
This includes loans originated for first-time buyers, mover-purchasers and buy-to-lets, but excludes top-up loans and mortgage switching as those categories were not counted when records began in 1970.
"To put the current level of mortgage lending into perspective, one must go all the way back to 1988," he points out.
"In that year, 36,939 mortgages were drawn down, according to data published at the time by the Department of the Environment. In 1988, there were approximately 3.5 million people living in Ireland. It was a time of severe economic hardship. Emigration was rife and jobs were scarce.
"Fast forward to 2023 and the economic landscape could not be more different. Yet, the mortgage landscape remains the same," he explains.
In the context of a population that has surpassed 5 million, if mortgage lending was managing to stay abreast of 1988 levels, we should - at a minimum - be seeing at least 54,000 mortgage drawdowns in 2023, Mr Conway calculates.
No big surprise
In many ways, it's not the most surprising of revelations, but it is emblematic of the issues plaguing the market right now.
Research by the Economic and Social Research Institute in 2022 found that the share of 25-34 year-olds who own their own home more than halved between 2004 and 2019, falling from 60% to 27%.
That figure is likely to fall further given that the average age of the first time buyer here is now 35 - and getting older.
Census data from the CSO has also reflected that trend with a continued decline in overall home ownership, falling from 70% in 2011 to 68% in 2016 and 66% in Census 2020.
There has also been a corresponding increase in the number of homes that are owned outright (without a mortgage) as older homeowners pay down loans in greater numbers and fewer new mortgagees enter the market to take their place, in effect.
Some of it is down to reduced supply and the fact that many who are approved for a mortgage may not be able to find a suitable property within their price range - or at all - for the duration of their approval.
Less affordable
A big part of it is, of course, affordability.
Separate figures from the Banking & Payments Federation in recent months showed that the average income of a first-time buyer household has grown to a record high of €82,000.
In Dublin and surrounding counties, that figure has exceeded €100,000.
A report from the Society of Chartered Surveyors (SCSI) this week concluded that a couple working in public sector roles, such as a Garda and a teacher, with combined gross earnings of close to €90,000 would not be able to afford to buy an average three-bed semi detached home in the Greater Dublin Area.
The so-called 'affordability gap' for these first time buyers in Dublin, Wicklow, Meath, and Kildare is around €60,000, it calculated. The gap in Galway its over €20,000.
"Availability of homes, and at affordable prices for those on average wages, has been and remains the main issue stalking the market," Pat Davitt, Chief Executive of the Institute of Professional Auctioneers & Valuers (IPAV) said.
He pointed to what he referred to as the "growing impediments" to home ownership, added to in the past 18 months by steep increases in interest rates from the European Central Bank.
"This means activity in the housing market is largely confined to those on higher than average incomes and those who are in the fortunate position to be able to buy homes without needing a mortgage, or perhaps a small supplementary mortgage. This latter group could be as high as 40%," he added.
Stiff competition
The fact is that, even among those in the fortunate position of having the means to purchase, there is a high degree of competition for the limited number of properties on the market.
Although housing completions have bounced back in the aftermath of mandated lockdowns during the Covid pandemic, the 32,695 homes that were completed here last year (an outcome that will most likely at least be matched this year) are not sufficient to meet demand.
To compound matters, the number of 'second-hand' or older properties coming to market is declining again.
According to a report from the property listings website, Daft.ie, there were just over 11,000 homes listed for sale on that platform on December 1st.
It was down 27% on the same date a year previously and dramatically lower than the pre-Covid average of 25,000 homes for sale at any particular time.
Figures from its counterpart, MyHome.ie, paint a similar picture of scarcity of homes.
And it's not just prospective owner-occupiers who are competing with each other for that tight pool of availability.
They are sometimes being muscled out by solo investors, investment funds, the State, and even companies - as evidenced by the revelation this week that Ryanair had purchased 25 homes in an estate close to Dublin Airport to provide affordable rental accommodation to some of its staff.
A study by TUD Housing Lecturer Dr Lorcan Sirr in recent years concluded that an ever-decreasing number of completed housing units are coming to market.
In 2017, roughly half of the completed units went up for sale, he calculated, but that proportion had declined to under a third in 2022 - albeit a third of a higher number of completions.
The remainder is accounted for mainly by a combination of apartments built-for-rent, social housing and one-off houses - with that latter category accounting for a small proportion of the overall figure.
According to Ibec in its latest economic quarterly published in December, the State or state-funded bodies alone have been buying, financing or leasing around 40% of new housing annually.
A helping hand
The State is not trying to price the first timer of the market and, in fact, has introduced generous incentives to help individuals get a foothold on the property ladder.
If it wasn't for schemes such as Help to Buy and the First Home Scheme, the situation would likely be much worse.
But it's difficult to escape the conclusion that they are expensive schemes that are driving up the prices of new homes, which are already rising steeply because of construction cost inflation and labour shortages.
Consequently, the Government will have to look at other means of making houses more affordable to the population at large.
"The Government needs to look urgently at addressing deep impediments that have changed little over the last decade, including, the high State take on home building, planning policy chaos and policy makers and influencers antipathy towards, and fear of, being seen to aid SME builders and developers who have traditionally been the mainstay of the Irish home building sector," Pat Davitt suggests.
The Society of Chartered Surveyors believes a better spread of housing in areas where it is simply more affordable would help. It also suggests more direct housing provision through state programmes, which would help to take the state out of the equation when to comes to competing for available units.
"Right now, new housing is most viable in the Greater Dublin Area, and this is where its most unaffordable. In very many cases the areas where new home building is least viable are the more affordable areas, such as the Midlands and Northwest," John O'Sullivan, Chair of the SCSI’s Practice and Policy Committee explained.
"To restore balance to the property market we need to ensure there is an adequate delivery of new housing through other avenues such as AHBs (Approved Housing Bodies), via the Land Development Agency and through direct public housing delivery," he added.
The reality is that it is a market that is filled with complexities with no quick fixes.
It has in the past been compared to a game of whack-a-mole. As soon as one problem appears to subside, another appears in its place.
This is perhaps best exemplified by the departure of landlords from the rental market.
In many cases, these housing units are being snapped up by first time buyers when they come to market, but that is at the expense of the rental market where rents are continuing to soar for new listings because of a sheer lack of availability of units.
The game of whack-a-mole looks like it will continue at quite a pace for some time to come.
