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Deposit? Check. So why am I still not able to buy a house?!

By February 23, 2021February 28th, 2021No Comments

Andrea Cleary looks at exactly what Covid-19 did to the first-time buyers’ property market, and why even with a deposit many of us are still struggling to secure forever homes…


Back in March 2020, the word of the day was uncertainty: Uncertainty about this new virus, the health impacts, the lockdowns, and the mental, social and economic impact of shutting down the country. Uncertainty about people’s businesses, jobs and livelihoods. When mass unemployment hits an economy, uncertainty around living situations – from homeowners to renters – is a given. 

And so, in March 2020, this uncertainty led to a lot of economic head-scratching about the effects of the pandemic on the Irish property market. Will there finally be – as seems overdue at this stage – a crash in property prices? Would the restrictions on movement mean that fewer people are viewing homes, fewer still buying, leading to sellers decreasing their prices to get the sale through? 

In a word: no. 

In fact, the impact of Covid-19 on property prices has been marginal at best. The crash, as was predicted, never came to be. 

According to financial advisor Micheal Dowling, prices dropped by around 5% between March and May of 2020, but since the re-opening of the economy to various degrees, the market has steadied again – and has even risen by around 1% compared to before the pandemic. So, what happened to the predicted crash?

“What Covid brought about was a reduction in the supply of property,” Dowling tells me. “Like anything, if there’s a reduction in supply, and you have two or more people interested in the product, that will increase the price. That’s, essentially, what happened. There were people competing with each other for a limited supply”. 

Shutting down the construction of new builds meant that fewer homes were being developed. As the year went on, buyers continued to compete with one another for housing that was becoming more expensive. 

So who exactly is able to buy homes during a pandemic? According to Dowling, there are four types of buyers who have remained unaffected by Covid-19 when it comes to affording a home. They are; public servants, employees of multinational companies, employees of large public sector firms (such as private consultants), and self-employed people whose income is not affected by Covid-19 (such as doctors). 

“If you add [these groups] together – there are 600,000 to 700,000 people who are not impacted financially by Covid-19. They didn’t get the PUP, their employer didn’t get the EWSS or the TWSS, those people are getting mortgages because their salaries are solid, and there is no risk to their income.”

This might go some way towards explaining why the market didn’t crash, and how it has remained stable. Simply put, those who were already buying homes – high-paid earners with secure jobs – were not financially impacted by the pandemic. Those who were affected – lower-paid workers in retail, the arts and the service industry – were not in a position to buy a home in the first place. 

It speaks to the systemic inequality of workers that a global pandemic which saw the loss of hundreds of thousands of jobs in various sectors had little impact on the housing market. Whenever there is economic uncertainty, mass unemployment or recession, it is those in lower-paid jobs who are economically affected – those who had been priced out of Ireland’s market long before 2020. 

“The people who have been impacted in getting mortgages are people who, firstly, their employer is in receipt of either TWSS or EWSS or if they’re on the PUP payment,” Dowling says.

“Neither of those categories can get a mortgage at the moment. That’s a simple fact. In some instances, I am saying to clients that there is no point in applying because they will only frustrate themselves. I can take them to a certain point in the process, but when they get to the serious stage – where they want the money – if their employer is still on the EWSS, they cannot get that money”. 

Perfect on paper

Grace* (31) and Patrick* (29) have been saving over the past three years for a deposit. Both originally come from smaller towns in the country and moved to Dublin separately a decade ago. They met in the final year of their PhD programme, and have been living as a couple in house shares and apartments since. 

Grace has managed to increase her mortgage savings (from around 40% of her salary per month before Covid to around 70% now). “It’s a dramatic change,” she says. Patrick has increased his savings too, with far less expenditure on the cost of commuting to work, socialising and travel. 

Grace and Patrick are – on paper at least – the kind of workers whose mortgage applications should have been unaffected by the pandemic. They have remained in their jobs, are able to work from home, and have been saving more and more towards their deposit. But this increase in savings hasn’t moved them any closer to buying a home. Even with a sizeable deposit saved, the uncertainty of work situations, as well as the increase in house prices, has meant that buying a house in the near future remains off the cards. They share their situation with many others in their age bracket; college-educated, well-paid jobs, and priced out of a market that is prioritising private development. 

One of the main issues with how Ireland is currently handling (or not handling) its housing crisis is the prioritisation of private developments. 

Private developments, Dowling tells me, mean significant extra costs for the buyer that wouldn’t exist if social housing was prioritised. 

He gave me one example: take a three-bedroom, semi-detached house in Dublin. The cheapest price for a house like this is around €350,000. “You can take it that at least €75,000 is the price of the land,” he says. “Then you have the cost of building services into that land, planning permissions, and so on.”

“The actual build-cost on that is around €200,000, so there are around €150,000 worth of other costs that are not there if we built on public land. And we can build a two-bed apartment or a three-bed house for around €200,000. That is how we will solve the problem of making housing available and affordable.”

The reality is, however, that there are people who can and are willing to overpay for homes, and the market will remain steady so long as there are people who can afford these homes. 

“It’s it crazy that in reality, people are buying a house that might be five or six times their income – that is the way the market is at the moment,” Dowling says. “The government has to take some responsibility because we are not building enough houses or apartments on public land, and we’re not doing it in an affordable way. That is a big criticism of the two main parties because they have been in power for the last 50 or 60 years.”

For Grace and Patrick, the search for a home that they can afford together is putting a strain on them. They have been, by all accounts, doing what they were ‘supposed to do’. They saved, they cut back on expenditure. They got high-paying jobs. Still, there is no sign yet of being able to buy a home, and start their lives in the way that they had envisioned for the future. 

“Supply is a huge element,” Patrick says. “There are lots of issues with that – some are complex, but some are simple. The fact that we prioritise private investors is a major factor that we’re seeing. I mean, all the Help To Buy scheme does is add an extra 30,000 Euro onto the price of your mortgage.”

“We’re eligible [for the Help To Buy Scheme], but so is everyone else who is like us. So it bumps us all into this bracket that allows the prices to keep rising,” Grace adds. 

Before Covid-19 hit Ireland, the couple had been thinking about moving out of Dublin, to a commuter town, where houses are more affordable. Now, with more and more people leaving the city, this has pushed up the prices in surrounding commuter towns. 

“The problem for us is that people are earning the same and saving more. People have more cash for their deposits, but supply is down because construction has stopped. We’ve resigned ourselves to leaving the Daft filters up and hope we get lucky, but really we’re not even chasing mortgage approval anymore,” Patrick says. 

“We had started trying to get approval in principle, but then we thought: why are we even bothering? There’s no point. It’s really disheartening,” Grace adds. 

“I have boxes under my bed in my family home of stuff that my mam has bought me for when I ‘get my home’. Cups and nice cookery things, just nice things for my home, and I’m now 31 and thinking: when am I going to put them in a drawer? I never thought that I could be 31 years of age and not able to hang a photo frame on the wall”. 


The idea of moving out of Dublin is something that Grace and Patrick have considered, but there is too much uncertainty around their working situations when the country opens back up once again. Anecdotally, there has been a lot of talk of people fleeing the cities for cheaper rent and housing in the country, but for the couple, it’s not as simple as all of that. 

Dowling is hesitant about this narrative of people setting up to work from home after the pandemic. 

“I’m not seeing that it is a trend that people want to move away from Dublin. 60% of economic activity happens in Dublin, and I have no doubt that in due course people will return to their offices in the same way that it was pre-covid. It’s a capital city, no different to any other capital city in the world it will have more people than in other towns and cities. I don’t think that is going to change.”

Grace and Patrick are uncertain about leaving as well. Prices in commuter towns have risen, and moving further out would mean that they would need guarantees from their Dublin-based jobs that they could continue to work from home. This is not something they’ve been given, and so they are forced to keep looking in Dublin and its surrounding towns, where they’re priced out. 

“It’s not going anywhere. It’s like climbing to the top of a mountain and hitting a brick wall.”

The couple is also not in a position to get financial help from their parents, something which Dowling cites as a major factor in the current high prices.

“It’s the Bank of Mammy and Daddy,” he says. 

“There will be a cohort of millennials who have no choice but to rent, the least we can do is give them protections to live in the same house for twenty years without being turfed out, or being subjected to significant increases in their rent.”

“We have a lot of dysfunctional things happening in the property market. That’s what led to this kind of discrimination between people who have access to lump sums and those who do not. There’s discrimination in the government not wanting to upset private developers by committing to building public housing on public land. That is what will solve the problem.”

“There are hundreds of acres of land that can be built on but there has to be the will there [from the government].”

For Grace and Patrick, all they can do is keep saving, hoping that they will get lucky with a property in their price range. Grace thought that saving the deposit would be the hard part. When they had managed it, the couple was understandably excited. 

“I told my parents that we had saved enough money for a deposit and were looking into mortgage applications – and they were so excited,” she remembers. “They’d say: ‘this is such a big step for you, this is so exciting.’ I actually had to tell them to stop asking me about it. They would ask me how it’s going, and it’s disheartening to keep having to say that, right now, it just isn’t happening”. 

*Names changed


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