Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/cbi/qtbart/y2016m10p56-70.html
   My bibliography  Save this article

Rental markets, savings and the accumulation of mortgage deposits

Author

Listed:
  • Kelly, Connor

    (Central Bank of Ireland)

  • McCann, Fergal

    (Central Bank of Ireland)

Abstract
The ability of households to accumulate mortgage deposits has featured prominently in the public debate in Ireland in recent years, due in large part to increases in rental prices and house purchase prices which have been ongoing since 2011 in some markets. In this article we use publicly available information on rental and house purchase prices across sixteen geographic regions in Ireland to calculate the required down-payment for a First-Time Buyer (FTB) purchase of a three-bedroom property. We then utilise this down-payment requirement to estimate the number of years of saving required (Time to Save, TTS), given current prices, to purchase a three-bedroom property while renting a two-bedroom property, for a couple with no children. The Irish housing market can be divided into three segments: Dublin, where TTS as of 2016q2 is estimated between 2.5 and 4 years depending on the area; other urban areas with TTS of 1 to 1.5 years; non-Dublin, non-urban areas where TTS is estimated below one year. Finally we show that relative to mid-2014 TTS has increased in Dublin by between one and two years, and under one year in other areas.

Suggested Citation

  • Kelly, Connor & McCann, Fergal, 2016. "Rental markets, savings and the accumulation of mortgage deposits," Quarterly Bulletin Articles, Central Bank of Ireland, pages 56-70, October.
    • Handle: RePEc:cbi:qtbart:y:2016:m:10:p:56-70
    as

    Download full text from publisher

    File URL: https://centralbank.ie/docs/default-source/publications/quarterly-bulletins/qb-archive/2016/QB4-16/quarterly-bulletin-no-4-2016.pdf?sfvrsn=#page=58
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chiuri, Maria Concetta & Jappelli, Tullio, 2003. "Financial market imperfections and home ownership: A comparative study," European Economic Review, Elsevier, vol. 47(5), pages 857-875, October.
    2. Chen, Chien-Liang & Kuan, Chung-Ming & Lin, Chu-Chia, 2007. "Saving and housing of Taiwanese households: New evidence from quantile regression analyses," Journal of Housing Economics, Elsevier, vol. 16(2), pages 102-126, June.
    3. Kinghan, Christina & Lyons, Paul & McCarthy, Yvonne & O'Toole, Conor, 2016. "Macroprudential Measures and Irish Mortgage Lending: Insights from H1 2016," Economic Letters 06/EL/16, Central Bank of Ireland.
    4. Keenan, Enda & Kinghan, Christina & McCarthy, Yvonne & O'Toole, Conor, 2016. "Macroprudential Measures and Irish Mortgage Lending: A Review of Recent Data," Economic Letters 03/EL/16, Central Bank of Ireland.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. McCann, Fergal, 2016. "Exploring developments in Ireland's regional rental markets," Economic Letters 13/EL/16, Central Bank of Ireland.
    2. Slaymaker, Rachel & Roantree, Barra & Nolan, Anne & O'Toole, Conor, 2022. "Future trends in housing tenure and the adequacy of retirement income," Research Series, Economic and Social Research Institute (ESRI), number RS143.
    3. McQuinn, Kieran & O’Toole, Conor & Slaymaker, Rachel, 2021. "Credit access, macroprudential rules and policy interventions: Lessons for potential first time buyers," Journal of Policy Modeling, Elsevier, vol. 43(5), pages 944-963.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lozej, Matija & Rannenberg, Ansgar, 2017. "The macroeconomic effects of the regulatory LTV and LTI ratios in the Central Bank of Ireland's DSGE model," Economic Letters 04/EL/17, Central Bank of Ireland.
    2. Kinghan, Christina, 2018. "Macroprudential Measures and Irish Mortgage Lending: Insights from H1 2018," Financial Stability Notes 8/FS/18, Central Bank of Ireland.
    3. Kinghan, Christina, 2018. "Macroprudential Measures and Irish Mortgage Lending: Insights from H1 2018," Financial Stability Notes 08-18, Central Bank of Ireland.
    4. Kinghan, Christina & Lyons, Paul & Mazza, Elena, 2018. "Macroprudential Measures and Irish Mortgage Lending: An Overview of 2017," Financial Stability Notes 01-18, Central Bank of Ireland.
    5. Kinghan, Christina & McCarthy, Yvonne & O'Toole, Conor, 2016. "The Effects of Macroprudential Policy on Borrower Leverage," Economic Letters 08/EL/16, Central Bank of Ireland.
    6. Lo Duca, Marco & Hallissey, Niamh & Jurca, Pavol & Kouratzoglou, Charalampos & Lima, Diana & Pirovano, Mara & Prapiestis, Algirdas & Saldías, Martín & Tereanu, Eugen & Bartal, Mehdi & Giedraitė, Edita, 2023. "The more the merrier? Macroprudential instrument interactions and effective policy implementation," Occasional Paper Series 310, European Central Bank.
    7. Kelly, Jane & Mazza, Elena, 2019. "Mortgage servicing burdens and LTI caps," Financial Stability Notes 13/FS/19, Central Bank of Ireland.
    8. A. Talha Yalta, 2011. "A Model of Down Payment Saving," Working Papers 1101, TOBB University of Economics and Technology, Department of Economics.
    9. Mitchell, Olivia S. & Piggott, John, 2004. "Unlocking housing equity in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 18(4), pages 466-505, December.
    10. Stolbov, M., 2012. "Financial Accelerator Theory and the Russian Mortgage Market," Journal of the New Economic Association, New Economic Association, vol. 13(1), pages 79-98.
    11. Rady, Sven & Ortalo-Magné, François, 2002. "Homeownership," Discussion Papers in Economics 28, University of Munich, Department of Economics.
    12. Guillaume Claveres & Thomas Y. Mathä & Giuseppe Pulina & Jan Stráský & Nicolas Woloszko & Michael Ziegelmeyer, 2020. "Housing and inequality: The case of Luxembourg and its cross-border workers," BCL working papers 144, Central Bank of Luxembourg.
    13. Malmendier, Ulrike M. & Steiny Wellsjo, Alex, 2020. "Rent or Buy? The Role of Lifetime Experiences on Homeownership within and across Countries," CEPR Discussion Papers 14935, C.E.P.R. Discussion Papers.
    14. Michael Warlters, 2023. "Stamp Duty Reform and Home Ownership," The Economic Record, The Economic Society of Australia, vol. 99(327), pages 492-511, December.
    15. Serena Trucchi, 2011. "How credit markets affect homeownership: an explanation based on differences between Italian regions," CeRP Working Papers 122, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    16. Corradin, S. & Gropp, R. & Huizinga, H.P. & Laeven, L., 2010. "Who Invests in Home Equity to Exempt Wealth from Bankruptcy?," Discussion Paper 2010-118, Tilburg University, Center for Economic Research.
    17. Andrea Camilli & Pedro Gomes, 2023. "Public employment and homeownership dynamics," Public Choice, Springer, vol. 194(1), pages 101-155, January.
    18. Peng, Ying & Tian, Chuanhao & Wen, Haizhen, 2021. "How does school district adjustment affect housing prices: An empirical investigation from Hangzhou, China," China Economic Review, Elsevier, vol. 69(C).
    19. Nazio, Tiziana & Saraceno, Chiara, 2010. "The impact of cohabitation without marriage on intergenerational contacts: A test of the diffusion theory," Discussion Papers, Research Professorship Demographic Development, Social Change, and Social Capital SP I 2010-402, WZB Berlin Social Science Center.
    20. Maria Chiuri & Daniela Del Boca, 2010. "Home-leaving decisions of daughters and sons," Review of Economics of the Household, Springer, vol. 8(3), pages 393-408, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbi:qtbart:y:2016:m:10:p:56-70. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fiona Farrelly (email available below). General contact details of provider: https://edirc.repec.org/data/cbigvie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.