One-fifth of Irish home buyers rely on inheritance for deposit

Home buyers in Ireland typically need a 20 per cent deposit to acquire a property which is lower than in many other European countries, new research reveals.

The Central Bank’s analysis shows that in recent years, Irish deposits-to-value ratios have moved more in line with other European households with the median level of down payments in Ireland at the lower end of the range relative to many other countries.

According to the bank's Economic Letter written by Jane Kelly and Reamonn Lydon, first-time buyers in Ireland typically needed a 15 per cent deposit last year to acquire a home.

The authors show the median down-payment for a non-Dublin first-time buyer in 2016 was €25,000, well below earlier peaks. However, for first-time buyers in the capital, down payments have been rising steadily since 2012, reaching €50,000 on average last year.

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Approximately one-fifth of Irish home-buyers reported having received an inheritance in the years immediately preceding a purchase, which is broadly in-line with other European households.

The value of the inheritance tends to be around half of the down payment amount, the report found.