Our Triggers

It is our 3rd year in Ireland. Since coming here, we have been renting in the same place. We love this place we are renting because it close to the train station, shops and schools. If we had it any other way, we really want to stay here for the long haul. However, there are some factors that is causing a bit of anxiety with our rental.

First is the yearly rent increase. Since we are in a rent pressure zone, the yearly increment is limited to 2%. We have got 2 rent increment so far. Rent take up 1/2 of my take home pay, with the increments there will be a point where I would not be able to afford staying here. I also checked with some friends, they have not got rent increase since staying in their places in South Dublin 4 years ago.

Then there is this “rumour” after the Irish election that the government is thinking of removing the rent pressure zone. There is talk that by removing the rent pressure zone, government is expecting more investment in construction of new houses. They think investors will think of the profit they can get, therefore invest more in building. Crazy that the government will think of troubling the people staying in Ireland and appeasing the rich, but that was our fear.

Finally, we were told that our rental contract for this property lapse after 6 years. That we have to sign a new contract after 6 years, and that time is coming fast. So we are not sure what it means by signing a new contract or even if it will happen. We just want to avoid the unknown after 6th year.

The Situation in Ireland

This is the year 2024, there is a housing crisis in Ireland. There is not enough houses on sale and the government is missing it’s yearly target for house construction. When I took up this job in Ireland, the hiring managed did say that the only cost of living trouble facing Ireland is the housing shortage. It’s a shortage that started around 2018, made worse in COVID when there’s no construction work happening. Ireland’s economy is growing, it is an EU country. There are tech and pharmaceutical businesses here that is attracting a lot of workers from overseas.

When we arrived here in 2022, news were showing 50 people queueing up to see one house for rent. Things has gotten better since 2024 in the rental market. There’s more rental properties, mainly apartments in the market. However houses for sales is still very low.

The situation in Ireland is not unique. Countries like Australia and UK is also facing housing shortages in key cities.

Started with a poster

One day I saw this poster near the company canteen. We have a small Bank of Ireland office near the canteen. Thought we would go and have a look at how to get a mortgage. We went to the proper bank branch for the open day, not the small one in the office. It was also a Saturday, typically not a day banks are open. Since the name is “open day”, we though it would be a booth and we can ask questions and see what we can do. When we arrived, the bank agent took us into her office and explained the process. At the end, we sat down with her to start the application process for the mortgage. There are a lot of differences in the process here vs what we are used to in Malaysia.

As a guideline, First time buyers maximum mortgage limit is 4 times your gross annual income with the mortgage capped at 90% of the purchase price. Second time buyers maximum mortgage is 3.5 times gross income with a cap also of 90% of the purchase price. She also explained since we are renting, if we found a more expensive house, they can apply a “stress” condition. Where they take how much we pay for rental as a way to show affordability, and use that as a way to increase the mortgage. Also as I later found out, I only used my base salary for calculation of the loans. They also can take into account my bonuses and some other allowances.

Starting the Application

The goal for the first step of application is to get a document called “Approval in Principle (AIP)”. This document tells the agent and seller that the bank has approved the mortgage to a certain amount. We need to provide this document in all bidding we did for properties.

We did not bring any documentation when we went to see the bank open day. The bank agent aske few question like how much is my base salary, how much savings I have in the bank and I was able to show her the balance in my bank account through the phone app. Of course she also took down the details of the bank accounts that I own.

The tough one was questions about my bank account in Malaysia and the mortgage that I currently have back home. We also need to tell her how many years of the mortgage left and what’s the interest on our loan. Those were information that I did not have that time so we put in some number.

The “interview” took about an hour to talk through. After that we got access to a mortgage portal. That’s when we need to enter the “real” information and provide the documentation to prove funds and income. Nothing too complicated. Mainly salary slip, revenue documents and loads of bank statement. Once they are satisfied with the documents, we got our AIP in days and can start our house hunting.