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.”