House prices in Cork are rising as affordability falls according to new figures devised by EBS and economic consultants DKM.
The July EBS-DKM Affordability Index shows couples in Cork city, who are first-time buyers, are spending 18% of their average net income on mortgage repayments with single house buyers forking out 27.3% of their average earnings. The average urban house price for first-time buyers is €208,090.
County house prices are higher for first-time buyers at €220,851, representing average repayments on loans of 19.1% of income for couples and 28.9% for single buyers, compared to a national average of 32.2% in May.
Dublin, Wicklow, Kildare, Galway City and Meath are the least affordable locations in the country, with buyers needing 20% to 26% of disposable income to fund a mortgage in those locations. Meanwhile Longford, Offaly and Leitrim were the most affordable counties. Less than 11% of a couple’s disposable income is required to fund a mortgage in these counties.
According to the report, the combined easing of Central Bank restrictions and the roll-out of the Government’s Help to Buy scheme may have contributed to an observed jump in demand and mortgage approvals to first-time buyers in the first half of 2017.
Ciara Morley, economic consultant with DKM said: “First-time buyers are facing more expensive mortgages and inflated pricing due to the chronic shortage of houses in Ireland.
“We are seeing an upward trend in the proportion of disposable income required to fund a mortgage for first-time buyers over the last two years and we expect that proportion required to continue to rise,” she added.
EBS chief executive Des Fitzgerald said the EBS-DKM tool provides valuable nationwide information for first-time buyers.
“The EBS-DKM Irish Housing Affordability Index is a great tool for people who are considering buying a home. It’s a big decision to make and having access to the information that’s in the Index can help people make a more informed decision.”