Large gap remains between average income and mortgage requirements
Cavan and Monaghan are among the more affordable counties in Ireland for first-time buyers. However, a single buyer still needs to earn €63,000 in Cavan and €64,000 in Monaghan to buy a typical first home - a massive gap compared to the median wage of these counties.
Economist Austin Hughes said: “With Irish house prices continuing to increase faster than wages, first-time buyers are finding it increasingly difficult to find a property they can afford, not just in Dublin or major urban centres but right across the country.”
According to research from Chill insurance, Cavan is the sixth most affordable county in the country and has among the lowest typical first-time buyer prices anywhere. Yet the local median income still falls far short of what a single buyer would need to borrow for a typical first home. Monaghan ranks eighth.
The research compared the median first-time buyer home price in each county, using Central Statistics Office (CSO) data. These figures were then assessed against the standard Central Bank lending rules, under which a buyer can borrow up to 90% of a home’s value and up to four times their gross income.
In Cavan a typical first-time buyer home is around €280,000. With a median income of €40,596 the gap to qualify for a mortgage of €63,000 is €22,404. In Monaghan, the figures are similar with home prices around €286,000 and a median income of €41,100. To qualify for a mortgage, an annual income of €64,350 would be needed.
The Chill report emphasises the nationwide nature of the problem faced by would-be homebuyers. Nationwide, no county is affordable for a single buyer on the national median salary of €44,816. As such home ownership is out of their reach unless they are in a position to get additional financial support from the State or their family.
Ian O’Reilly, Director of Sales and Operations said: “For many first-time buyers, closing that gap means saving a larger deposit, buying with another person or looking at State supports such as the First Home Scheme or the Local Authority Home Loan.”