Friday 17 November 2017

Commuter crisis: Families forced to buy two counties away from workplace

House price increase
House price increase
Mark Keenan

Mark Keenan

City workers are now buying homes up to two counties away, facing a commute of more than an hour to get to their desks - a phenomenon not seen since the peak of the Celtic Tiger.

Central Bank restrictions on mortgages have been blamed for the demise of the first-time buyer in Dublin and the return of the long-haul commuter.

Estate agents told the Irish Independent/Real Estate Alliance (REA) Average House Price Survey that prices are being driven up in Dundalk, Laois and Waterford.

Dubliners who cannot obtain a loan under Central Bank lending restrictions are searching for these homes, even though they face massive commutes.

Read more: Cash buyers squeezing out 25-40 age group

The trend corresponds with the sharp fall-off in first-time buyers in the 25-to-40 age group in Dublin city and county also highlighted by agents.

And this fall-off is now also becoming evident in the 'traditional' commuter belt of Meath and Kildare, as many homes in these areas are already out of their price range.

A current loan limit of 3.5 times earnings, when applied to a typical salary of €40,000, results in a loan of just €140,000. This won't even buy a one-bedroom apartment in Dublin.

A typical target for a new buyer from Dublin is now a home located more than an hour's drive from the city that is priced close to that limit.

The absence of these mortgaged buyers has caused prices to fall or remain static in Dublin city. It saw the price of the average semi rise by 0.23pc in the first quarter of the year to €358,333, but fall by 6.1pc on the €381,667 average home price of a year ago. Prices in the south county area are up by 0.74pc in the first quarter but down 7.4pc overall on a year ago.

Aided by the availability of new housing developments, north county prices rose 2pc in the first quarter and 2pc overall over the last 12 months to a current value of €252,500.

Static prices were also evident in Meath in the first quarter, and up just 1.3pc (to €195,000) on a year ago. Similarly, Kildare prices rose just 0.52pc in a year to €242,500.

In contrast there were big jumps in prices in 'long-haul' commuter counties such as Cavan, where prices were up 15.4pc in the year, to €75,000. Prices rose in Westmeath by 10.2pc to €135,000; in Laois by 4.2pc to €125,000; in Offaly by 12pc to €140,000 and in Waterford by 9.6pc to €157,500.

Prices in Galway city have also stopped rising, with no increase in the first quarter. Rises in Cork city were slight at 1.74pc in the first quarter, but outlying homes in Cork county rose by 3.7pc in the first quarter - up a heady 14.5pc in the year.

REA agents around the country state that many local rises are being created "artificially" by a lack of stock driving up prices. REA chairman Michael O'Connor said: "We are seeing a marked absence of the 25-40 year olds at viewings in the capital over the past few months as, under the current Central Bank restrictions, they are finding it impossible to raise the deposits needed to purchase houses over the €220,000 limit.

"Conversely, we are seeing growth in commuter interest in counties previously considered at the edge of the daily travelling limits such as Laois and Offaly, simply because the price is right.

"Although supply is extremely limited, suitable properties are now being bought in these areas by buyers who are prepared to travel over an hour to work in the capital," said Mr O'Connor. "Lack of supply of suitable housing is the paramount issue nationwide."

Irish Independent

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