The EBS/DKM Affordability Index presents an analysis of changes in affordability for First Time Buyers in the Irish housing market.
Housing affordability returning to levels last seen in the mid 1990s.
The cost of funding a mortgage, nationally, at the end of 2012, for the average first time buyer (FTB) working couple stood at 11.7% of their joint disposable income - significantly lower than the 26.4% recorded at the peak of the boom in 2006.
The average FTB property price nationally was estimated at €134,051 in December 2012 or 3.69 times average earnings. The corresponding estimate for Dublin was €170,114 or 4.25 times average earnings for Dublin FTBs.
House prices and interest rates continue to be main driver for affordability.
Key Highlights from November 2012 Index
- Residential property prices nationally are down 50% since their peak and 9.6% in the last year but have been broadly flat for the last 7 months.
- First Time Buyers continue to be the strongest segment, with 51.1% of new lending in Quarter 2, 2012.
- The average first time buyer working couple is spending 11.7% of their joint income to fund a mortgage, compared with 26.4% in December 2006.
2012 provides further improvement in affordability for First Time Buyers
Key Highlights March 2012
- Residential property prices nationally are down 48% since their peak and 16.7% in the last year.
- First Time Buyers continue to be the strongest segment, with 6,381 mortgage advances in 2011.
The EBS / DKM Affordability Index shows that by December 2009, First Time Buyer monthly repayments will have fallen by €513 since July 2008 (on a national basis) - roughly 43%. However, negative equity fears and oversupply remain a concern.
Affordability - at 14% - is back to the levels of the mid-nineties.
The EBS / DKM Affordability Index shows that affordability for first time buyers continues to improve and that this trend is set to persist, despite reductions in incomes.
EBS/DKM Housing Affordability Index continues to show an improvement.
Our analysis of renting versus buying shows a couple is better off buying today rather than renting if they retain their property for more than three years, even after allowing for a 10% reduction in average house prices over the course of 2008.
Stability in the Housing Market is Good News for First-Time Buyers' Affordability.
By December the average first time buyer working couple in Ireland was spending 22.6% of their net income on mortgage repayments, compared with 26.4% a year ago.