Irish First-Time Buyer Mortgages Return to Celtic Tiger Levels as Housing Market Surges

Irish First-Time Buyer Mortgages Return to Celtic Tiger Levels as Housing Market Surges

First-time buyer mortgage drawdowns in Ireland have returned to levels not seen since the height of the Celtic Tiger boom, with 9,437 new mortgages worth just over €3 billion drawn down in the latest reporting period — a figure that reflects both the pent-up demand for homeownership and the persistent failure of supply to keep pace with a growing population.

Background

Ireland's housing crisis is one of the defining political and social challenges of the current generation. The collapse of the construction sector during the 2008 financial crisis left a structural deficit in housing supply that has never been fully addressed. Population growth, driven by natural increase and significant inward migration — including the arrival of Ukrainian refugees since 2022 — has intensified demand at precisely the moment when supply has been most constrained.

The Celtic Tiger era, which ran roughly from the mid-1990s to 2008, was characterised by rapid economic growth, rising wages, and a construction boom that ultimately proved unsustainable. Mortgage lending during that period reached levels that, in retrospect, were clearly excessive — fuelled by loose credit conditions, speculative investment, and a regulatory environment that failed to keep pace with the risks being taken. The comparison to Celtic Tiger mortgage levels is therefore not an unambiguous positive: it raises legitimate questions about whether history is repeating itself.

The Irish government has introduced a range of measures to support first-time buyers, including the Help to Buy scheme, the First Home shared equity scheme, and the Local Authority Home Loan. These interventions have helped to bring homeownership within reach for some buyers who would otherwise have been priced out of the market — but they have also been criticised for adding to demand without addressing the underlying supply problem.

Key Developments

The latest mortgage drawdown data shows 9,437 new mortgages worth just over €3 billion drawn down by first-time buyers in the most recent reporting period. This represents a significant increase on the previous year and brings drawdown levels back to those last seen during the Celtic Tiger era. The data reflects a market in which buyers are stretching their finances to secure properties in a competitive environment.

In related business news, Allianz Ireland has announced plans for an €81 million dividend payment to its parent company, bringing its total dividend distribution since the pandemic to €434 million. Cantor Fitzgerald has signed a deal for a new Dublin headquarters at Bindery House on South Frederick Street, reflecting continued confidence in the Irish capital as a financial services hub. The Bank of Ireland has revised its forecast for Irish GDP growth down to 1.6% for 2026, citing the impact of the Middle East conflict on global trade and energy prices.

Why It Matters

The return of mortgage drawdowns to Celtic Tiger levels is a double-edged development. On one hand, it reflects genuine economic confidence and the desire of a generation of Irish people to achieve homeownership after years of being priced out of the market. On the other hand, it raises serious questions about affordability and sustainability. Irish inflation is expected to average 3.3% in 2026, which will erode the real value of wages and put pressure on household budgets. If interest rates remain elevated — as the European Central Bank has signalled — the cost of servicing those mortgages will increase.

The housing crisis will not be resolved by demand-side interventions alone. A Kyiv official recently commented that Ireland's housing problems predate the arrival of Ukrainian refugees and will not be resolved simply by discontinuing accommodation for those fleeing the war — a pointed observation that cuts to the heart of the political debate. The fundamental challenge is supply: Ireland needs to build significantly more homes, in the right locations, at the right price points, and with the infrastructure to support them.

Local Impact

For first-time buyers across Ireland — in Dublin, Cork, Galway, and the commuter belt — the mortgage data reflects a market that remains intensely competitive. Properties in desirable areas are selling above asking price, and the gap between what buyers can afford and what is available continues to be a source of significant stress. In Northern Ireland, the housing market has shown signs of recovery but remains more affordable than the Republic, with average house prices significantly lower than in Dublin. Cross-border buyers are an increasingly significant feature of the market in border counties.

What's Next

The government's Housing for All plan is due for its next progress review in May 2026. The Central Bank of Ireland will publish its next mortgage market report in June, which will provide a more detailed picture of lending conditions and affordability. The Dáil is expected to debate a series of housing measures in the coming weeks, including proposals to accelerate planning decisions and increase the supply of social housing. The question of whether to extend the Help to Buy scheme beyond its current end date will be a key issue in the Autumn Budget.

Sources: The Irish Times | Bank of Ireland Outlook