The report this week from the Banking and Payments Federation Ireland (BPFI) found the typical, or median, household income of first-time buyers in Ireland stood at €91,000 for those purchasing new homes and €74,000 for those buying from the second-hand market.
These figures, based on the second half of last year and excluding so-called self-build properties, suggest that the majority of first-time buyers are pooling their resources between two people to get a first mortgage, as CSO data shows the average income for a full-time employee in the State is just below €47,000 a year. This highlights the affordability gap at play in the property market, making it extremely difficult for a single buyer to purchase a first home. The BPFI says it doesn’t differentiate between single or joint buyers, as it bases its individual mortgage accounts on households (single or joint).
The Mortgage Market Profile report breaks down the median income for first-time buyers in different regions with Dublin and Wicklow, unsurprisingly, requiring the highest income figure – €103,000 for new homes, €89,000 for second-hand homes in Dublin; €98,000 for new homes, €90,000 for second-hand homes in Wicklow – while the border counties require the lowest income in the State for second-hand homes at €60,000 and the southeast and west regions require the lowest income for the purchase of new homes at €79,000.
For those aiming to buy their first home, it is important to evaluate how long it will take to save the required deposit of 10 per cent of the value of a property, a task made more difficult by the high cost of rent, especially in the capital.
Current lending rules dictate first-time buyers can borrow up to four times their gross annual income. These are some of the properties a “typical” first-time buyer income, as defined by the BPFI’s report, could afford around the country.
Aderrig, Adamstown, Lucan
Asking price: Two-bed own-door apartments from €380,000, selling through Sherry FitzGerald
Deposit: €38,000. Eligible to receive €30,000 through Help-to-Buy scheme; €8,000 savings needed
Mortgage: borrowing €342,000 with payments of about €1,400 over a 35-year term with a four-year fixed green mortgage at 3.4%
The median household income for first-time buyers of new homes in Dublin is €103,000, according to the mortgage profile report, meaning buyers in that pay grade can borrow up to €412,000 (four times their earnings). A first-time buyer of a new home can also avail of the Help-to-Buy scheme, which provides 10 per cent of the house value up to a maximum of €30,000.
A search through property listings reveals a shortage of supply in new homes in these price ranges. However, A-rated two-bedroom own-door apartments (79sq m) were released last weekend at Arderrig in Adamstown, with prices starting from €380,000. Receiving €30,000 through the Help-to-Buy scheme, a buyer would need €8,000 in savings to complete the deposit, and could apply for a mortgage to the value of the outstanding €342,000.
Cluain Glasan, Ayrfield
Asking price: Three-bed semi-detached homes from €370,000, selling through Knight Frank
Deposit: €37,000. Eligible to receive €30,000 through Help-to-Buy scheme; €7,000 savings needed
First Home scheme: €17,000 (bridges gap between €316,000 mortgage amount and cost of home less the deposit)
Mortgage: borrowing €316,000 with monthly payments of about €1,400 over a 30-year term with four-year fixed green mortgage at 3.4%
The median household income for first-time buyers of new homes in the southeast region, including counties Kilkenny, Carlow, Wexford and Waterford, is the lowest in the country, along with the west region, at €79,000, according to the BPFI report. The border and the south/midwest regions are slightly higher at €80,000 and €81,000 respectively, with the midlands recording a median of €84,000.
With the help of Government schemes, first-time buyers with a joint household income of €79,000 could potentially buy a home in Glenveagh’s new Cluain Glasan development in Ayrfield, just outside Kilkenny city. The A-rated three-bed semi-detached homes in the scheme, measuring from 95sq m to 118sq m, start at €370,000.
Buyers on the median income in that region could, therefore, apply for a mortgage of €316,000 (four times their yearly earnings) and receive €30,000 of the deposit through the Help-to-Buy scheme, meaning they would need just €7,000 in savings. This would leave a €17,000 gap, which could be bridged by the First Home shared-equity scheme, where the Government takes a stake in the property in return for up to a maximum of 20 per cent of the cost price. When received in tandem with the Help-to-Buy scheme, the maximum value you can receive is 20 per cent, whereas it’s 30 per cent without it.
These homes have yet to be brought to the market but a small number of units are available to be reserved off plans, according to the selling agent Knight Frank.
6 Castlegrange Way, Swords
Asking price: €390,000, selling through Sherry FitzGerald Swords
Mortgage: borrowing €351,000 with monthly payments of about €1,550 over a 30-year term on variable rate of 3.4 %
Those earning the €89,000 median household income for first-time buyers of second-hand homes in Dublin could potentially get a mortgage of up to €356,000, on top of which they would have to save a deposit of 10 per cent of the house value. A search through live property listings shows it is difficult to find anything bigger than a two-bedroom property close to the city at this price point, with results consisting primarily of small terraces, apartments and fixer-uppers. However, widening the search further outside the city provides some move-in ready three-beds.
This refurbished three-bed semi (80sq m) in Swords is in turnkey condition, meaning you wouldn’t have to spend more on it before you move in, with a low-maintenance paved back garden, a studio granny flat at the end of the garden and a C1 Ber. It is a 30-minute drive from the city centre, with good public transport and local amenities close by. It would likely suit first-time buyers working in the city centre.
The typical household income of first-time buyers in Dublin’s commuter counties follow close behind the capital with the median in Wicklow at €90,000, €76,000 in Kildare and €73,000 in Meath.
137 Glenbrook, Old Singland Road, Limerick City
Asking price: €280,000, selling through Chesser Auctioneers
Mortgage: borrowing €252,000 with monthly payments of about €1,120 over a 30-year term with variable rate of 3.4%
Counties with cities file in next with Limerick at the lower end, where the median household income for first-time buyers of second-hand homes stands at €66,000, while it is €69,000 in Galway and €72,000 in Cork.
Those earning the median household income for first-time buyers of second-hand homes in Limerick could potentially get a mortgage of up to €264,000 on top of the required 10 per cent deposit. This price bracket offers a decent amount of choice in the county and the city, where there is a healthy supply of semi-detached homes appearing on the market.
This four-bed semi (125sq m) on Old Singland Road is move-in ready but would benefit from a cosmetic refresh. The property has a C3 Ber, two downstairs reception rooms and a large back garden. It is in a convenient spot around the corner from Childer’s Road Retail Park and is just a 10-minute drive from the city centre.
43 Abbeycartron, Longford Town
Asking price: €275,000, selling through Padraic Davis Auctioneers
Mortgage: borrowing €247,500 with monthly payments of about €1,100 over a 30-year term on variable rate of 3.4%
According to the BPFI report, the midlands is the region with the fourth lowest median household income for first-time buyers of second-hand homes in the State, although at €64,000 it is not much higher than the €60,000 median income recorded for the border counties, the lowest listed median household income. Those earning the median household income in the midlands could potentially get a mortgage of up to €256,000 once they save the 10 per cent deposit.
Buyers can get a bigger home for their money in the midlands and this four-bedroom detached property in Longford town is a fine example. You could move in to this property (135sq m) straight away and new flooring and paint would go a long way to modernising the interior on a budget. With ample garden space, it has a D1 Ber and is located a 10-minute walk from the town centre and a kilometre from the N4 Dublin-Sligo road.
3 O’Neill’s Terrace, Mill Park Road, Enniscorthy, Co Wexford
Asking price: €275,000 selling through Sherry FitzGerald O’Leary Kinsella
Mortgage: borrowing €247,500 with monthly payments of about €1,100 over a 30-year term on variable rate of 3.4 %
The southeast and the south/midwest regions, as defined in the BPFI report, both recorded a median household income for first-time buyers of second-hand homes of €63,000, with the west region – including counties Mayo, Sligo and Roscommon – recording a median of €62,000. Those earning the median household income in these regions could potentially get a mortgage of up to €252,000 in combination with a 10 per cent deposit.
A search for listings, however, suggests there is a current shortage of homes in that price range in those regions.
However, this expertly refurbished three-bed terrace in Enniscorthy is a gem, with period features, hardwood floors, sash windows and a modern sage-green kitchen. With a D2 Ber, it also has big lawned garden to the rear. The property is walking distance from the town’s amenities and the promenade.