A working couple who are first-time buyers would need to earn between €100,000 and €125,000 to afford a new two-bed apartment in an Irish city, with the affordability gap, and housing shortage, threatening economic and employment growth.
That’s according to a report released today by economic consultants EY-DKM, which found the current cost to build a two-bed apartment in locations like Cork City, docklands, or suburbs is between €389,000 and €486,000.
To purchase, a couple would also need to have saved a cash deposit of between €39,000 and €49,000.
The current high apartment build costs mean that build-to-rent apartments would need to be rented at €2,500 a month for a two-bed, or €3,000 a month for a three-bed, to make their construction financially viable.
The study was commissioned from EY-DKM Economic Advisory’s Annette Hughes jointly by Cork Chamber and the Construction Industry Federation.
It warns “the cost of construction of new apartments is significantly beyond viability and is threatening future economic growth in Ireland’s cities.”
According to CIF southern region spokesman Conor O’Connell “unless the total cost of apartment delivery comes down, new apartments will remain un-viable and developers will not be able to build housing that satisfies demand in local markets. A third of the final price the buyer pays goes directly to the State and is outside the control of developers.”