Can you afford a home in Ireland?

Elessar · 28-12-2018 09:47AM #1

Goodbody just released a new assessment of the housing market that states while more houses are slowly being built, the majority are well out of reach of most people:

In 2018, 31% of new houses sold were for more than €350,000, up from just 23% in 2017. In Dublin, more than half of new homes were sold for more than €350,000, and one in five were for over €500,000.

To get a mortgage for a 350k house you would need a joint income of at least 90k + 35k deposit. But I don't know where these 350k houses are in Dublin because even where I live, 20km from the city center, all new builds are over 400k. Meaning a 40k deposit and over 100k joint income. I've seen quite a few 500k+ builds aswell - requiring a 130k joint income aswell as 50k deposit.

Two features are particularly striking in the data. Firstly, there is a very large proportion of the population who cannot afford to get on the housing ladder without significant outside support, be it from the Government or family and friends.

Assuming joint income earners on the same income, roughly half of the 1.5 million notional couples have a joint income of less than €45,000 per year.

Assuming these couples can raise a 10% deposit, the maximum they can afford for a house is €175,000. The private market cannot deliver homes at this price point.

The second observation relates to how the numbers drop off substantially once household income rises above €110,000. This couple can theoretically borrow enough to purchase a house worth €430,000, with a 10% deposit. Just one-in-10 couples could afford to pay this price, yet one-in-six new houses this year were sold above this value.

It's clear that construction costs (and profit margins) are so high that building houses that average people can afford is not viable. Meaning 1.5 million people will potentially be relying on government subsidised housing, most I assume, in Dublin.

Yet, anecdotally, all of the 400k+ houses in my area have sold and even this far from the CC there is huge demand - so clearly, a lot of people can still afford these prices.

I know the even with a relatively well paid job in IT I cannot afford to buy a home. What about other boardsies?

Princess Consuela Bananahammock · 28-12-2018 10:10AM

Elessar wrote: »

Goodbody just released a new assessment of the housing market that states while more houses are slowly being built, the majority are well out of reach of most people:

To get a mortgage for a 350k house you would need a joint income of at least 90k + 35k deposit. But I don't know where these 350k houses are in Dublin because even where I live, 20km from the city center, all new builds are over 400k. Meaning a 40k deposit and over 100k joint income. I've seen quite a few 500k+ builds aswell - requiring a 130k joint income aswell as 50k deposit.

It's clear that construction costs (and profit margins) are so high that building houses that average people can afford is not viable. Meaning 1.5 million people will potentially be relying on government subsidised housing, most I assume, in Dublin.

Yet, anecdotally, all of the 400k+ houses in my area have sold and even this far from the CC there is huge demand - so clearly, a lot of people can still afford these prices.

I know the even with a relatively well paid job in IT I cannot afford to buy a home. What about other boardsies?

What, you have a right to own a house now...?

How much do you think you should be earning before being offered a mortgage?

28-12-2018 10:11AM

Have a mortgage for the last 2 and a half years, North West Wicklow. Paying less for the mortgage per month (4 bed semi) than the rent we paid for a one bed apartment in Rathmines in 2007.

Peatys · 28-12-2018 10:13AM

There's houses in miller's glen in swords for 320k op.
Swords express will have you into the city centre in less than 30min.
You're welcome.

Pawwed Rig · 28-12-2018 10:17AM

Peatys wrote: »

There's houses in miller's glen in swords for 320k op.
Swords express will have you into the city centre in less than 30min.
You're welcome.

Swords is a great spot. Proper town full of facilities.

StereoSound · 28-12-2018 10:18AM

I wish I could afford my own home, I have a good paying company job and self employed at the same time in a growing business, and yet the banks won't touch me for 350 - 400k mortgage. I'm ****ed to my eye balls paying landlords rent for years to come.

sydthebeat · 28-12-2018 10:23AM

Almost 40% of the costs of building a house goes back to the government / state bodies in some form.... Be it VAT, income tax, prsi, development contributions, connection fees etc.

If the government wanted houses to be more affordable is within their gift to do that tomorrow.

They don't however, because:
1. They get nearly 40% from every house build
2. People are still purchasing at these levels
3. They say they are afraid builders will pocket the savings due to 2 above.

gozunda · 28-12-2018 10:28AM

Princess Consuela Bananahammock wrote: »

What, you have a right to own a house now...?

How much do you think you should be earning before being offered a mortgage?

No but if you don't work or come from else where you can get one handed to you by all accounts ....

Peatys · 28-12-2018 10:30AM

Pawwed Rig wrote: »

Swords is a great spot. Proper town full of facilities.

Pavilions, airside, airport, m1, sure where else would you be

Try_harder · 28-12-2018 10:32AM

Reader, I bought one

ytpe2r5bxkn0c1 · 28-12-2018 10:35AM

Can you afford to buy a house?
Well obviously people can, as the houses are being bought and most are as owner occupied.

Buy where and what you can afford.

NSAman · 28-12-2018 10:36AM

Save save and save again is the key.

Just bought another house as my retirement plan for cash. OK it is a fixer upper, but I will save for a complete renovation and even then do a lot of the work myself. There are ways and means if you want to roll up your shirt sleeves and work at it.

Trigger Happy · 28-12-2018 10:37AM

When I was first buying 15 years ago my parents lamented that they were glad they did not have to buy in this market- the prices been so high.
I reckon I will be saying the same to my kid when he gets to thinking about buying.

cherryghost · 28-12-2018 10:40AM

Right now I probably couldnt. I got a house 3 years ago just around the time of major uptick in house prices so I consider myself very lucky.

Cianos · 28-12-2018 10:40AM

StereoSound wrote: »

I wish I could afford my own home, I have a good paying company job and self employed at the same time in a growing business, and yet the banks won't touch me for 350 - 400k mortgage. I'm ****ed to my eye balls paying landlords rent for years to come.

How much do you make in both, if you don't mind my asking (ballpark?)

Princess Consuela Bananahammock · 28-12-2018 10:46AM

gozunda wrote: »

No but if you don't work or come from else where you can get one handed to you by all accounts ....

Really? Perhaps the OP should emigrate, wait a while then return home.

gozunda · 28-12-2018 10:52AM

Princess Consuela Bananahammock wrote: »

Really? Perhaps the OP should emigrate, wait a while then return home.

Nope that won't work I'm afraid. Move abroad and work - then come home and you're deemed non resident for welfare purposes afaik ...

Government priority in housing at present appears to be for social housing only. Affordable housing for those working but unable to afford housing in areas within reach of their employment doesn't exist for some reason ...

Try_harder · 28-12-2018 10:54AM

gozunda wrote: »

Nope don't work I'm afraid. Move abroad and work - then come home and your deemed non resident for welfare purposes afaik ...

start working and building up your stamps

Social Housing is hardly aspirational

gozunda · 28-12-2018 10:57AM

Try_harder wrote: »

start working and building up your stamps Social Housing is hardly aspirational

That was a comment on the status quo not any 'personal' situation tbh. As for 'aspirational' - Magaret Cash et al seems to be aspiring alright. How's your 'stamps' (sic) btw?

Wildly Boaring · 28-12-2018 11:00AM

Does your job HAVE to be in Dublin?

Even the title says "In Ireland"

Have a mate in IT he recently bought a lovely house by the sea in Sligo and will work from home.

Plenty places 30 mins from Cork, Limerick, Galway are affordable

Wheeliebin30 · 28-12-2018 11:03AM

NSAman wrote: »

Save save and save again is the key.

Just bought another house as my retirement plan for cash. OK it is a fixer upper, but I will save for a complete renovation and even then do a lot of the work myself. There are ways and means if you want to roll up your shirt sleeves and work at it.

That’s the problem nowadays.

People want everything now with a click of their finger.

No working towards anything or saving, it’s all about the now.

Princess Consuela Bananahammock · 28-12-2018 11:04AM

gozunda wrote: »

Nope don't work I'm afraid. Move abroad and work - then come home and you're deemed non resident for welfare purposes afaik ...

Government priority in housing at present appears to be for social housing only. Affordable housing for those working but unable to afford housing in areas within reach of their employment doesn't exist for some reason ...

So... He doesn't even need to move abroad? He just... stops working? And the state gives him the deeds to a house...?!

weldoninhio · 28-12-2018 11:07AM

Elessar wrote: »

Goodbody just released a new assessment of the housing market that states while more houses are slowly being built, the majority are well out of reach of most people:

To get a mortgage for a 350k house you would need a joint income of at least 90k + 35k deposit. But I don't know where these 350k houses are in Dublin because even where I live, 20km from the city center, all new builds are over 400k. Meaning a 40k deposit and over 100k joint income. I've seen quite a few 500k+ builds aswell - requiring a 130k joint income aswell as 50k deposit.

It's clear that construction costs (and profit margins) are so high that building houses that average people can afford is not viable. Meaning 1.5 million people will potentially be relying on government subsidised housing, most I assume, in Dublin.

Yet, anecdotally, all of the 400k+ houses in my area have sold and even this far from the CC there is huge demand - so clearly, a lot of people can still afford these prices.

I know the even with a relatively well paid job in IT I cannot afford to buy a home. What about other boardsies?

If evictions were quicker and houses were sold ASAP, prices would fall. This craic of having to wait 4/5 years to evict someone is ridiculous.

Atoms for Peace · 28-12-2018 11:08AM

Social division is going to skyrocket if something isn't done, just browse through the recent threads on here there a seething undercurrent of resentment from taxpayers.
I get angry myself when skangers seemingly act with impunity yet expect everything for free, but work hard and you get hit from all sides with little in return.

myshirt · 28-12-2018 11:09AM

Peatys wrote: »

There's houses in miller's glen in swords for 320k op.
Swords express will have you into the city centre in less than 30min.
You're welcome.

Except they are not 320.

Wanderer78 · 28-12-2018 11:09AM

Wheeliebin30 wrote:

No working towards anything or saving, itâ€™s all about the now.

It's funny how many working people can't afford to buy a house, isn't it!

NSAman · 28-12-2018 11:15AM

Wanderer78 wrote: »

It's funny how many working people can't afford to buy a house, isn't it!

It is an issue, but it took me 20 years from my first starting work to afford my own little place.

I was in my 40s before I had my own house. Just because you are earning decent money does not entitle anyone to a house.

Yes I am lucky now, I own quite a few homes, but that is due to working my ass off and saving and a change in my circumstances brought about by chance, luck and work and using my brain.

It is never easy starting out in life and that first purchase is always going to be the hardest. My only advice to anyone (as everyone is different) is to work hard, save and dont expect the glossy shiny house, buy what you can afford and still save.

stateofflux · 28-12-2018 11:16AM

I wish posters would stop with the 'buy where you can afford shtick'..it implies things are the same as they always were...which is not true.

It is a fact that cost of living has become disproportionate with earnings since the crash with salarys staying fixed for the most part and cost of living rising

This coupled with lack of housing supply & lending rules has made it a lot harder to afford a home in a liveable area.

I would guess the cash buyers now have been saving for a long time and/or have family cash support..

Its gonna get a lot worse before it gets better..

Would not be surprised with govt being shamed into proper action with embarrassing housing/homeless headlines in world media

Keatsian · 28-12-2018 11:16AM

Wildly Boaring wrote: »

Does your job HAVE to be in Dublin?

Even the title says "In Ireland"

Have a mate in IT he recently bought a lovely house by the sea in Sligo and will work from home.

Plenty places 30 mins from Cork, Limerick, Galway are affordable

And if they lose that job they'll have a massive problem because there aren't a wealth of jobs of any description, IT or otherwise, in that part of Ireland.

Elessar · 28-12-2018 11:18AM

Princess Consuela Bananahammock wrote: »

What, you have a right to own a house now...?

How much do you think you should be earning before being offered a mortgage?

What? Troll harder, or better still read the OP.

Peatys wrote: »

There's houses in miller's glen in swords for 320k op.
Swords express will have you into the city centre in less than 30min.
You're welcome.

Em, where exactly?

https://www.daft.ie/dublin/new-homes-for-sale/millers-glen-millers-glen-swords-dublin-99487/

The whole point is it is becoming impossible for the average person to buy a home due to costs spiralling out of control. I can see a situation where costs are so great that it becomes commercially unviable to sell houses for less than 500k. Meaning even couples on above average salaries will rely on state house building.

Wheeliebin30 · 28-12-2018 11:21AM

Wanderer78 wrote: »

It's funny how many working people can't afford to buy a house, isn't it!

No what’s funny about it?

Go to Germany Sweden etc the majority don’t own a house.

Can you afford a home in Ireland?

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