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Property prices will moderate over the next year, but they have risen so much in the past decade that buying in most places remains out of reach for many people on average incomes.

Even though the rate of increase in property values is due to ease off, prices are still set to increase by 4pc this year, a survey of estate agents carried out by the Society of Chartered Surveyors Ireland (SCSI) has found.

The price surge up to now has left buyers struggling to afford to buy, according to the SCSI.

The surveyors looked at three scenarios where a couple on €89,000 have a 10pc deposit, and want to buy a new home in Kildare, Cork or Meath. They would qualify for the State’s Help-to-Buy scheme.

The report shows that a garda and a nurse couple – on a combined salary of €89,000 after 10 years’ service – looking to buy a new house, would face a shortfall of €64,000 in Kildare and €30,000 in Cork.

Only in Meath would they be able to buy – and by what the surveyors said was a modest margin of just over €6,000.

Chair of the SCSI policy and practice committee John O’Sullivan said the ability to buy an affordable home was now an impossibility for thousands of people around the country.

He said the figures showed that affordability and viability remained critical issues for the Irish property market.

“These figures show that buying an affordable property remains out of reach for thousands of Irish people on average salaries looking to buy their first home,” he said.

“Of course, you are also going to have thousands of people on salaries below this level,” Mr O’Sullivan said.

He added that the situation for first-time buyers is set to get worse, with spiralling construction costs and interest rate increases on the way.

“It looks as if the situation facing first-time buyers is set to become even more challenging,” Mr O’Sullivan said.

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“From a home-builder’s perspective, if people can’t afford new homes, that raises questions over their viability, and overall housing supply.”

Prices have shot up by 118pc since 2013.

Estate agents who are members of the SCSI expect property prices to continue to increase over the next year, but say the rate of increase will fall.

Agents expect property prices to increase by an average of 3pc over the next three months, and by 4pc over the next year.

Mr O’Sullivan said the moderation in the rate of increase is to be welcomed as annual rates of inflation of 14pc or 15pc, which have been seen recently, were simply not sustainable in the long term.

General inflation, which is running at around 8pc, has been cited as one of the main factors that will lead to an easing of property price rises.

Other contributing factors include rising interest rates, supply-chain issues, and geopolitical uncertainty caused by Russia’s invasion of Ukraine.

Two other property price surveys also show price rises easing off.

DNG said that at a national level, excluding Dublin, the annual rate of growth in prices eased back to 12pc for the year to June, from a rate of 13.6pc in the year to December 2021.

Sherry FitzGerald also said the rate of house price growth is showing signs of moderation.

It said the average value of second-hand homes in Ireland increased by 1.6pc in the second quarter of 2022.

This represented the slowest rate of quarterly growth in over a year.

However, the pace of growth remains elevated. Over the opening six months of the year, average values rose 4.5pc, matching the same rate recorded over the first six months of last year.


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