Buyers are now forced €20k more into debt for first homes as mortgage borrowing hits the roof

First-time buyers are now borrowing an average €250,000 to get on the property ladder.

This is up almost €20,000 from last year, according to figures from the Banking and Payments Federation.

And it is the highest level since the start of 2008, the peak of the Celtic Tiger housing bubble.

When mover mortgages are included, the average home-loan drawdown is now €263,000.

This is up almost €18,000 since the start of last year, and is the highest average drawdown figure since the height of the Tiger bubble.

The most recent figures from the Central Statistics Office show property prices are now just 2.5pc off the highest level they achieved in 2007.

A chronic shortage of homes to buy means prices are surging at a rate of 15pc a year.

The figures show a total of 9,910 new mortgages to the value of €2.5bn were drawn down by borrowers during the first quarter of this year.

This is an increase of 9pc on the same period last year.

Chief executive of the Banking and Payments Federation Ireland Brian Hayes said: “These increases very much reflect the trend in average home price increases which is due to the lack of supply in the market.”

Separate figures show that close to 5,700 new homes were completed in the first three months of this year.

Around 70pc of housing completions in Dublin were apartments, according to the Central Statistics Office figures.

And across the State some 20pc of the housing completions in the first three months of this year were one-off houses.

Senior lecturer in housing at Technological University Dublin Lorcan Sirr said housing output was way up, but fewer homes were coming to the market.

Large institutional investors were behind large apartment schemes with these only being offered for rent.

Dr Sirr said that although there has been a 43pc increase in overall housing supply since 2017, the amount of new housing coming to the market for sale has decreased.

It is down from nearly half of all output in 2017 to just 28pc last year.

“There were just 5,698 new houses built for sale last year out of a total supply of 20,433 new houses overall,” he said.

Increases in supply have been mostly accounted for by social housing and new build-to-rent apartments.

“This means there are fewer new houses to buy for first and second-time buyers,” Dr Sirr said.

Asked if we were heading for a new property crash, the housing lecturer said the Central Bank lending limits have stopped house-hunters from over-borrowing and prevented banks from lending in a reckless way.

“The Central Bank lending limits are the pin preventing the grenade from exploding,” he said.

“Should they be increased, people will merely have more money with which to compete against each other and the State which is also active in the same market.”

And Goodbody Stockbrokers economist Dermot O’Leary agreed that the large number of apartments being built for rent and social housing being bought off builders meant “owner-occupier supply will stagnate or even possibly shrink this year in the context of ongoing high levels of first-time buyer demand”.

There were 14,400 property transactions so far this year, with an average price of €360,000, according to figures from the Property Price Register collated by Davy Stockbrokers Conall Mac Coille.