Leitrim home prices 'only going one way' as buyers face €50K income hurdle
“No builder will build a three-bed semi-detached house unless they can get a price of €360/370,000 for it,” said Leitrim Auctioneer
A single buyer in Co. Leitrim still needs to earn €55,125 to buy a typical first home, which is priced at €245,000 in the county. That is more than the county’s median income of €41,162, leaving a gap of €13,963 between what people earn and what they need.
Carrick-on-Shannon based auctioneer Fintan McGill of DNG McGill told the Observer that the research is in line with his experience on the ground.
“It is a matter of supply and demand. There is pent-up demand. Most people are going to the bank of mam and dad,” he stated.
He went on to outline how the property market has changed and that a lack of supply is a major problem. “The difference between now and the economic crash of 2008 is that there is no property to buy,” he commented.
McGill went on to say that “no builder will build a three-bed semi-detached house unless they can get a price of €360/370,000 for it.”
Another set of figures, released recently by the ERSI, stated that house prices in Ireland are overvalued by 17%.
In reaction to this, McGill stated that, “price rises are not being driven by agents. First-time buyers are outbidding each other.”
“The bank of mam and dad is helping these people,” he added.
There is reportedly €170 billion in savings held in accounts in Ireland and some of this money is undoubtedly being given to first time buyers.
McGill went on to state that Co. Leitrim is an attractive place to live. “Carrick-on-Shannon is a remarkable town. Co. Leitrim is a very attractive place to live,” he stated.
However, he added that house prices are “only going one way.”
Leitrim also has the lowest salary requirement of any county in Connacht.
However, the local median income still falls short of what a single buyer would need to borrow for a typical first home.
The research compared the median first-time buyer home price in each county, using the Central Statistics Office’s Residential Property Price Index, with median local incomes from CSO earnings 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.
“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,” according to economist Austin Hughes.
“The Chill report emphasises the nationwide nature of the problem would-be homebuyers face. Even allowing for ongoing wage growth, in no county is the typical first-time buyer property accessible at present to the median wage-earner, unless they are in a position to get additional financial support from the State and/or their family,” Hughes added.
National findings show that no county is affordable for a single buyer on the national median salary of €44,816.
In three counties, a six figure salary is needed.