A typical couple with two good salaries will find themselves up to €80,000 short of buying their first home in some counties around Dublin, a new report has warned.
The Society of Chartered Surveyors Ireland (SCSI) report finds that 80% of estate agents believe current home prices are too expensive and predict prices will increase by a further 4.5% in the next year.
It also reveals that a couple with a combined income of €107,000 - equivalent to the earnings of a Garda and a nurse with ten years’ experience - would fall €78,000 short of qualifying for a mortgage on a three-bed semi in Wicklow.
The report, which analysed five counties in Ireland using the same metric, found that the average couple would face similar shortfalls in Kildare (€65,000), Cork (€12,000), and Galway (€8,000).
On The Pat Kenny Show today, SCSI Vice President Gerard O’Toole said current home ownership schemes don’t go far enough.
“The various schemes are all welcome and they’re good initiatives,” he said.
“I think with the Help to Buy Scheme, some counties become viable [to purchase homes in], but others are not.
“The other one is the First Home scheme; a great initiative, but unfortunately, the caps within the price range for those counties are actually lower than the average prices.”
Rental crisis
Mr O’Toole said the rental situation isn’t much better.
“We've known for some time that the rental market, just like the broader housing market, is grossly undersupplied,” he said.
“Whilst there are rent pressure zones in many areas throughout the country, rents continue to rise.
“The net disposable income to service rent on average across the EU might be somewhere around 30%, but the data we released suggests that in some cases, these income percentages are as high as 37% or 38%.
“That’s not sustainable - and people are hard strapped.”
A general view of construction work on an affordable housing scheme in Dublin. Picture by: PA Images/AlamyMortgage adviser Karl Deeter said most people don’t even complete their mortgage applications.
“They find out what they can actually get from a bank and think, ‘Wow, I guess we’ll be saving for a while longer,’” he said.
“Then there’s the whole issue of trying to recalibrate your life to what you can actually afford versus what you’d hoped for.
“I think everyone goes through that as you’re growing up; you’ve got the life you’d love to lead and then the life you actually lead.
“Some people make it to the best and greatest, but not everyone needs a three-bed semi, and not everyone needs to own a house, for that matter.”
The report also found that 77% of estate agents believe house prices will level off in the near future.
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Main image: A couple shows off the key to their new home. Image: Robert Kneschke / Alamy Stock Photo
