Wednesday, August 05, 2020

The CSO’s Residential Property Price Index for May has shown only a 0.7% increase outside of Dublin, where there has been no change whatsoever.

Rachel McGovern, Director of Financial Services at Brokers Ireland.

Responding to the figures released last week, Brokers Ireland has said that while prices generally are reasonably steady, albeit with much lower volumes arising from the Covid-19 shutdown, underneath all is not well in terms of affordability for aspiring first-time buyers (FTBs).

Rachel McGovern, Director of Financial Services at Brokers Ireland, which represents 1,250 Broker firms, said with a mean house price of €296,043 in the year to May, a FTB would need an income of €84,584, based on the Central Bank income limit of 3.5 times income.

“In addition such a buyer would need to have saved a deposit of €29,604.

“Hence, it is not surprising that less than a third of purchasers are FTBs,” she said.

And she said the pandemic is likely to exacerbate an already difficult situation for the lower-income cohorts.

“Already we know that home building is going to be woefully behind schedule as a result of the pandemic. In December last the Central Bank estimated we need 36,000 new homes each year over the next decade. More recently the Bank now estimates that delivery will be down to just 16,000 this year.”

She said such scarce supply is likely to “keep house prices steady, if not elevated.”

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