20pc deposit ruling sending young adults back home to live with their parents
More than a quarter of young adults are moving back into their parents’ homes to save money for a deposit on a new house.
A new survey found that 26pc of adults aged between 25 and 34 decided that paying rent makes it too hard to save.
They may need to stash away enough money for the new 20pc deposit rule required to get a mortgage for a new home.
So the time has come to pack up and move back in with mum and dad.
The survey also found that more than two-thirds (69pc) agreed that the expectation among Irish people of owning their own home was unrealistic.
The results come following new statistics released in April showing house prices rose 16.3pc year-on-year, compared with an EU average of just 1.1pc.
House prices rose 4.6pc in the first quarter of this year, but growth in Dublin prices was lower than the rest of the State.
The average asking price nationally is now €201,000.
The survey, on behalf of Aviva Home Insurance, showed the vast majority of people (72pc) cited the need for security as the main driver for their wish to own their own home, while 43pc said they wanted to be able to bequeath a property to their children. Just over a third (36pc) said they felt pressurised by family and friends to own a substantial asset.
Even though the 20pc mortgage deposit requirement recently introduced by the Central Bank has made it more difficult for first-time buyers to get on the property ladder, almost half of those surveyed (49pc) think it is a necessary measure and 43pc think it will work.
Confidence in the new rule is higher among the 18- to 24-year-old age group, 58pc of whom believe it will be effective.
“Ireland’s first experience of a serious property crash seems to have made us more cautious when it comes to buying property,” said Sharon Treanor, marketing manager at Aviva Home Insurance.
“Despite the extra burden the new 20pc deposit rule puts on young people seeking to get on to the property ladder, almost half of those surveyed support the need for the higher deposit and 40pc go so far as to say that it’s fair.
“Even though a quarter of those in the 25 to 34 age group are taking steps to save for a deposit – including moving back in with their parents – our traditionally strong attachment to home ownership seems to be loosening,” she said.
“The belief that we are likely to follow the European pattern by becoming a nation of renters is now widespread and is particularly strong (74pc) among the 18 to 24 year age group: the next generation of potential home buyers,” she said.
“A definite shift in attitudes is under way,” she added.