. . . but has reality finally dawned as rates rise, asks Edel Morgan

I spoke to two mortgage brokers during the week who said that even first-time buyers - who were bolstering the market with a bumper start to the season despite five ECB interest rate rises - have cooled their jets. This can partly be attributed to seasonal factors but, according to Spencer Botting of PrimaFinance.ie, the prospect of another interest rise next month has finally "scared a few people".

He says some are holding on to see what the Budget will bring stamp duty-wise. Ultimately, though, he reckons that first-time buyers - many of whom have only really known boom time and cheap credit - will eventually adjust to higher interest rises, and he pointed out that we still haven't reached the UK base rate of 5 per cent.

The problem, in Dublin especially, is that the combination of astronomical house prices and interest rates has pushed many first-time buyers to their absolute limit and reduced the amount they can borrow. If Rosita Boland's feature in last Saturday's Irish Times Weekend supplement is anything to go by, loans and financial gifts from parents are propping up the market, with most of her interviewees saying they couldn't have bought without help.

What I found fascinating about the article is that, despite the fact they had little or no money saved themselves and were dependent on their parents to fund the purchase, very few had any intention of curbing their lifestyle. One interviewee, a teacher, said she intended to continue treating herself and didn't want mortgage repayments to stop her enjoying herself or having an annual holiday.

You got the impression that the notion of slumming it for a few years with hand-me-down sticks of furniture is completely anathema to this Celtic Tiger generation, and the attitude of all but a few people interviewed was live now, pay later, and don't think too much about the future.

There also seemed to be a certain sense of entitlement, and a definite predilection towards instant gratification. They choose shiny new homes over second-hand because they provide a low maintenance, instantly presentable place to live - and who could blame them for that? Quite a few opt for 100 per cent mortgages even though their parents may have given them enough money for a deposit. The lump sum is used instead to furnish their new homes and keep them financially solvent.

One first-time buyer went for a 30-year mortgage, saying she could have reduced the term to 25 years but she was afraid it might impinge too much on her lifestyle. In contrast to previous generations, they mostly seemed unfazed by being in debt up to their eyeballs, and the view is that if the credit is available, they are going to grab it with both hands. It's all about having your cake and eating it, and enjoying the best of all worlds - a well furnished home they wouldn't be ashamed to bring their friends into and a busy social life.

There is a widespread pre-occupation with keeping up appearances. I spoke to an agent a while ago who said that, even on the rental market, many young professionals won't consider moving into a dated apartment block because it wouldn't suit the successful dynamic image they are trying to project to the world. She referred to it as "old block syndrome", i.e. an extreme aversion to any apartment complex older than 10 years. She had a waiting list for swanky glazed apartments in the prime dockland areas despite the fact they commanded premium rents.

In stark contrast to all of this frenzied living-it-up, a Polish couple from Waterford interviewed in Saturday's feature had managed to save a remarkable €50,000 in five years through hard work and personal sacrifice. They put half of it on a deposit on their new three-bed home. They explained they came from a background where work was hard to come by and there's a culture of putting money by for a rainy day. They were perfectly happy entertaining their friends at home and not going out to restaurants but were understanding of the Irish attitude to money, saying we are not used to saving.

Maybe we're not, but most of us have parents that know all about saving hard and making do. After years of parsimony, those same parents are now very generously handing their savings over to their children to get them started on the property market.

It would seem that all is not lost for the younger generation on the savings front, however. Consistently high numbers of SSIA-holders have responded in surveys that they intend to continue putting money by each month. With the majority of SSIAs yet to mature, it is as yet too early to tell how many are following through on this.

So could the current slow-down in the first-time buyer market be an indication that, with another interest rate rise in the offing in December, the realisation has dawned that having it all is no longer an option - unless mammy and daddy's budget is limitless that is. Or is this just a temporary pause for breath until they turn out in force for more frenzied buying in the New Year?

Watch this space.

- emorgan@irish-times.ie