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Very few Irish people are buying new apartments. Is it because they can’t – or won’t?
Apartments are going up across Dublin – yet few are sold to individual buyers. Why?
Bit of a missed opportunity here, mostly focused on so-called "vulture funds" & cost of building, without mentioning the number of units taken up by Part V (20%) in mixed type developments (I've seen developments locally where most or all of the apartments built where there is a mix of houses & apartments are given over to part V), or more pertinently the continuing banking policy where first time buyers can get a mortgage on just 10% deposits for 2 bed or larger homes, but must provide a deposit of 20% or more for 1 bed apartments or studios.
AIB are still doing this, PTSB told me that they make exceptions in most Dublin suburbs (that was in 2021).
If AIB are still doing this assuming many other lenders are also.
Worked example based on current daft adverts in a north Dublin town, assuming legal costs & registration fees of no more than 3k
1 bed, asking price 215k - minimum deposit 43k + stamp duty 2.1k + 3k legal costs = 48.1k
2 bed asking price 275k - minimum deposit 27.5k + stamp duty 2.75k + 3k legal costs = 33.25k
On the matter of a mortgage based on 4x the applicants income, assuming a solo buyer:
1 bed, mortgage of 172k - minimum income required is 43k pa
2 bed, mortgage of 220k - minimum income required is 55k pa
This is a very crude example - I used these two properties in same development as examples
8 Chestnut House, 23 Applewood Square, Swords, Co. Dublin is for sale on Daft.ie
8 Chestnut House, 23 Applewood Square, Swords, Co. Dublin a 1 Bed Apartment is now for sale by DNG McKenna Healy Skerries on Daft.ie with an asking price of €215,000
1 Applewood Drive, Swords, Co. Dublin is for sale on Daft.ie
1 Applewood Drive, Swords, Co. Dublin a 2 Bed Apartment is now for sale by Thomas Power on Daft.ie with an asking price of €275,000
Given that the 43k pa earner would take much longer to raise a deposit than the 55k pa earner, its unlikely that they would be able to acquire such a deposit (or by the time they do, price appreciation might have put the property out of reach).
This, and a cultural stigma attached to apartments for other reasons, is a very significant part of the reason why we have few buyers for 1 bed properties.