One fifth of a working couple’s combined post-tax income is needed to pay the mortgage on their first home, according to a new study.
The EBS DKM Housing Affordability Index says the average first-time buyer property price nationally was €232,552 in August, implying a mortgage of €195,344 with an average 84% Loan to Value (LTV) ratio.
The corresponding monthly mortgage repayment was €1,009, which compares with the average monthly rent nationwide of €1,037.
The index is a measure of the proportion of after-tax income required to meet the first year’s mortgage repayments for a working couple, each with an annual salary of €36,600.
It takes into account the average property price, the mortgage rate, as well as the couple’s disposable income.
The findings come as new figures from the Central Statistics Office show residential property prices nationwide rose by 7.3% in the year to September.
Meanwhile, the EBS DKM research also found the least affordable area for first-time buyers in August was Dun Laoghaire Rathdown in Dublin, where it takes almost 34% of after-tax income to pay the mortgage.
The average FTB property price in Dublin was estimated at €314,303 in August, implying an average mortgage of €264,015, assuming an 84% LTV ratio.
The corresponding average monthly mortgage repayment was €1,364, which compares with average monthly rents in Dublin of between €1,351 (West County) to €1,735 (South County).
Outside of Dublin, the least affordable counties are Wicklow, where mortgage repayments account for 26% of after-tax income, followed by Kildare (22%) and Meath (21%).
The most affordable county is Roscommon, with an average price of €73,000, where it takes just 7.4% of the couple’s after-tax income to fund a mortgage, while the figure is 9.8% in Mayo.
