First-time buyers in four counties spending one-third of income on monthly mortgage repayments

First-time buyers in Dublin, Wicklow, Kildare and Meath are spending approximately one-third of their income on mortgage repayments each month.

A new research study by the ESRI has provided an insight into the differences in first-time buyer affordability in different parts of the country.

Using data from the CSO's Residential Property Price Index, the report assessed the differences for buyers in different parts of the country and tracked the changes in prices for first-time buyers from 2013 to 2018.

The report, compiled by Matthew Allen-Coghlan, Conor Judge, Conor O’Toole and Rachel Slaymaker under a programme with the Department of Housing, Planning and Local Government, identifies greater challenges with affordability in Dublin and the commuter counties around the capital.

The findings suggest that, in 2018, first-time buyers in Dublin were spending 35% of their income on their mortgage. In Wicklow, it was 36%, with both Meath and Kildare over 30% too. In 14 counties, the spend was between 20% and 30%. This includes Cork (27%), Galway (28%), Kerry (21%) and Waterford (22%).

In comparison, people in eight counties were spending less than 20%, including Tipperary, which was 17%.

The study also shows that the prices paid by first-time buyers vary widely in different parts of the country.

In 2018, at just under €375,000, the mean first-time buyer house in Dublin cost more than three times that of one in Longford (€116,000).

The prices for homes bought by first-time buyers bottomed out in the country in 2013. Since then, they have risen year-on-year and, in 2016, they surpassed 2010 levels.

There are significant differences across the country, though.

In Dublin, Wicklow and Kildare, prices are above the national average of €283,000. The next highest priced counties are Cork, Galway, Limerick and Louth, with prices lowest in the north-west of the country.

On average, first-time buyer house prices increased by 7.3% between 2017 and 2018, slower than the 12.6% increase between 2016 and 2017. Since 2013, first-time buyers have seen prices increase by 56.4%.

Higher than average growth over that period was observed in counties surrounding Dublin - Louth, Meath and Kildare, as well as in Cork, Laois, Monaghan, Waterford and Wexford.

In Cork, the average first-time buyer home cost €255,780. It was an increase of 9.9% from 2017, and an increase of 58.9% from 2013.

This is faster growth than in Dublin, where prices increased by 5.7% to €374,041, but slower than Limerick, where prices are up 14.7% from 2017 to €213,252.

Laois saw the largest growth between 2013 to 2018 at 71.8%, while in Mayo, prices increased by 26.5%, the lowest in the country.

Conor O’Toole, ESRI research and author of the report, said: "While house prices across Ireland appear to be well explained by economic fundamentals such as labour market developments, affordability continues to be a challenge."