New homes 'totally out of reach' for couples on average salaries 

An SCSI report predicts residential property prices will rise 2% in the next year. Picture: Andrew Matthews/PA

New homes remain “totally out of reach” for couples on average salaries in many areas, with prices forecast to continue rising over the next 12 months.

The latest report from the Society of Chartered Surveyors Ireland (SCSI) analyses the ability of couples with a joint income of €89,000 to buy a new home in five different counties.

In Cork, Galway, and Meath, couples on these salaries would need a deposit of €38,000 to be able to afford the price of a new home.

In Kildare, first-time buyers would find themselves almost €32,000 short of the purchase price of a new three-bed semi-detached home. The situation is worse in Wicklow, with first-time buyers facing an affordability gap of €83,200 to buy their first home home, even if granted the maximum mortgage by their bank.

“For those who earn less than this income level on average, the disparity between their borrowing capacity and the cost of purchasing a property will be even greater,” the report said.

“Many individuals in this group may be renters who aspire to become homeowners but struggle to save for a down payment while covering monthly rent expenses, which can sometimes surpass the amount they would need to repay a mortgage."

The report also predicts that residential property prices will rise by 2% in the next 12 months, while nearly half of estate agents believe that credit conditions have deteriorated. It also found the Government’s housing supply targets are “well below the level required” for a growing population.

“The rise in construction costs is also affecting the supply of new homes, leading to concerns regarding the viability of certain projects,” said SCSI practice and policy committee chair John O’Sullivan.

While the Government target for new home supply this year is 29,000 residential units, this is still well below the level required.

It comes after a new report from the ESRI highlighted Ireland’s level of homeownership in people under 40 being among the lowest in Europe.

Sinn Féin housing spokesperson Eoin Ó Broin criticised the Government for 'failing' renters and young prospective homeowners. Picture: Dan Linehan

Sinn Féin’s housing spokesperson Eoin Ó Broin said the findings were “very stark” and criticised the Government for “failing” renters and young prospective homeowners.

He said independent analysts have repeatedly warned that existing housing targets are too low and higher targets need to be set and achieved to solve the housing crisis.

Separately, new data provided by the Department of Housing suggests that the number of homes where construction began in the first half of 2023 was 15,561, a 10% rise on the first half of last year.