First-time buyers cannot afford a home in almost half of counties

First-time buyers cannot afford a home in almost half of counties

First-time buyers on average incomes cannot afford a home in almost half of Ireland’s counties, a new study shows.

A report issued by EY-DKM Economic Advisory also reveals that it takes more than 15 years for first-time buyers in Wicklow, Meath, and Kildare to save the required 10% deposit for a home. 

In contrast, it only takes residents of Leitrim 1.3 years to save for a deposit.

The report, Just How affordable Is Housing For Ireland's First-Time Buyers?, provides an analysis of Ireland’s housing market and highlights the fact that the lack of affordable houses for first-time buyers has moved beyond urban centres, such as Dublin and Cork, and has now become a nationwide problem.

The report assesses affordability using two factors: Whether first-time buyers can afford a property based on a mortgage of 3.5 times their household income, and secondly, their ability to accumulate a 10% deposit, as required by Central Bank rules.

Wicklow, Meath and Kildare top the results as the most unaffordable when it comes to saving for a deposit, with an average of 15+ years required to save 10%. 

Roscommon follows closely behind at 10.4 years, while, in contrast, first-time buyers in Dublin are required to save for 4.3 years.

Leitrim is the most affordable county, with a little over one year required to achieve a 10% deposit.

Commenting on the report, Annette Hughes, director, EY-DKM Economic Advisory, said: “Ireland is an economy of contrasts, and our analysis provides striking evidence of the differentials in housing affordability. 

"In half the country, a deposit would take three years or more to save, meaning that for many, house ownership is currently out of reach.

“While incomes nationally have grown, rents have grown much faster, which has resulted in an ever-increasing pressure on first-time buyers’ ability to save. 

"We know that supply is a key contributor to these challenges, so it’s encouraging that construction activity has ramped up in recent years.

However, simply building more housing is not the solution.

Dublin, Cork, Galway, Meath, Wicklow, Kildare and Louth remain out of reach to the majority of first-time buyers, even if the 10% deposit was achieved.

However, houses in all other areas of Ireland are relatively affordable in terms of mortgage repayments.

Ms Hughes added: “It is vital that the balance between owner-occupied and build-to-rent developments is carefully managed to deliver affordable rents, which will not only increase living standards but free up money to save for a deposit. 

"Our analysis sheds light on the scale of the challenge facing Ireland if it is to achieve the objectives set out in the Project Ireland 2040 Plan, whilst at the same time showing the opportunities available to attract talent to areas other than Dublin.”

More on this topic

Housing Minister denies co-living housing plan is 'out of touch'Housing Minister denies co-living housing plan is 'out of touch'

Latest: Eoghan Murphy hits out at critics of 'trendy' co-living suggestion for young peopleLatest: Eoghan Murphy hits out at critics of 'trendy' co-living suggestion for young people

Homeless families move into new social housing development in DublinHomeless families move into new social housing development in Dublin

Man warned he faces prison if he does not leave repossessed home Man warned he faces prison if he does not leave repossessed home

More in this Section

Man fined for deer-poaching in Wicklow MountainsMan fined for deer-poaching in Wicklow Mountains

UCC researchers find hundreds of centuries-old newletters in Medici vaultsUCC researchers find hundreds of centuries-old newletters in Medici vaults

GSOC investigate after Garda accidentally shoots himself in the footGSOC investigate after Garda accidentally shoots himself in the foot

Substantial delays on upgrades to West Cork hospitals Substantial delays on upgrades to West Cork hospitals


Lifestyle

Garbage offered a pop twist on grunge’s maximalist angst when they materialised in a dramatic swirl in the mid-Nineties. Like a candy-cane Nirvana, they were bleak and baroque but with tunes you could hum in the dark.Garbage's return to Dublin well worth the wait

Circle back to fashion's hottest retro print, says Annmarie O'Connor.Trend of the Week: Circling back to fashion's hottest retro print

Ever wondered what it would be like to move lock, stock and barrel into a tiny home, like the ones on Netflix’s Tiny House Nation?Are you ready to join the tiny-house movement?

Kya deLongchamps reports back on the performance of her photovoltaic array and wonders if it could handle the addition of an electric carDIY: Get ready for a natural high

More From The Irish Examiner