Monday 22 July 2019

First time buyers in Louth saving for three years still can't afford a home

A new report has found that first time buyers in Louth have to save for almost three years for a deposit but that the house prices are so high that they are out of reach for most people buying their first home even when they have saved that deposit.

The report issued last week by EY-DKM Economic Advisory, confirms that nearly half of all counties (46%) in the Republic of Ireland are now unaffordable for first-time buyers on an average income, with Louth ranking number 17 on the list for affordability.

In some counties, first time buyers on an average income will need to save for over 15 years for a 10% deposit

In Louth, the report finds that it takes first-time buyers on an average income 2.8 years to save for a deposit. The Dublin commuter counties of Wicklow, Meath and Kildare top the results as the most unaffordable when it comes to saving for a deposit, with an average of 15+ years required to save 10%. Between 2015 and 2018 property prices in Louth grew by 10.9%.

Commenting on the report, Annette Hughes, Director, EY-DKM Economic Advisory said, 'Ireland is an economy of contrasts, and our analysis provides striking evidence of the differentials in housing affordability. In half the country, a deposit would take three years or more to save, meaning that for many, house ownership is currently out of reach. While incomes nationally have grown, rents have grown much faster, which has resulted in an ever-increasing pressure on first time buyers' ability to save. We know that supply is a key contributor to these challenges so it's encouraging that construction activity has ramped up in recent years, however simply building more housing is not the solution.'

Ignoring the need for a deposit, the report assessed affordability when looking at the ability to meet mortgage repayments, based on a mortgage of 3.5 times household income. In this instance, houses across the country are deemed significantly more affordable, with just seven counties classed as unaffordable using this metric.

Dublin, Cork, Galway, Meath, Wicklow, Kildare and Louth remain out of reach to the majority of first-time buyers even if the 10% deposit was achieved. However, houses in all other areas of Ireland are deemed relatively affordable on this measure. First-time buyers in Louth were found to have a mortgage to income ratio of 3.9.

Annette added, 'It is vital that the balance between owner occupied and build-to-rent developments is carefully managed to deliver affordable rents which will not only increase living standards but free up money to save for a deposit. Our analysis sheds light on the scale of the challenge facing Ireland if it is to achieve the objectives set out in the Project Ireland 2040 Plan, whilst at the same time showing the opportunities available to attract talent to areas other than Dublin.'

The Argus