16 Aug 2022

Affordability relatively low for Kildare first time buyers

Kildare mortgage to income third highest in country, ESRI study finds

Affordability relatively low for Kildare first time buyers

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Kildare is the third most relatively expensive county in the State for a first time home buyer to buy a home, according to a recent study.

The Economic & Social Research Institute study, A County Level Perspective on Housing Affordability in Ireland, uses average house prices for first time buyers and average incomes to work out mortgage repayment to income ratios (MRTI) for potential first time buyers.

The study found that between 2016-2018, the MRTI increased for all counties.

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The authors found that in 2018, the ratio was over 30% in Dublin, Wicklow, Kildare and Meath but they added that they did not look at the feasibility of borrowing in this study.

Wicklow had the highest with an MRTI of 0.36, based on a monthly payment of €1,217, which means that 36% of the income went on mortgage.

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Dublin was next with 0.35 with a payment of €1,423 and Kildare was third on 0.32 with a monthly mortgage of €1,129. Meath was 0.31, Laois, 0.22, and Offaly, 0.20.

Given that prices vary within Kildare, the average is just that, an average.

The authors looked at within Dublin and found that Fingal, with a payment of €1,258 had an MRTI of 0.28 

In 11 of the 26 counties, the ratio was below 20%.

It also found that only Kildare, Dublin and Wicklow averages were above the national first time buyer (FTB) average of €283,000 and that mean or average FTB were below, and, in many cases, well below €200,000 for 18 of the 26 counties.

The said their study showed that a first time buyer couple on the mean income, buying the mean FTB priced house “will have sufficient income left over after paying their mortgage instalments to attain at least a minimum level of consumption in all counties.”

In their introduction they noted that a 2019 study found that 86.5% of renters wanted to own a home.

They also noted that cheaper properties grew faster than more expensive ones, this increasing the affordability concerns of first time buyers, who tend to buy lower prices houses than second and subsequent borrowers.

In Kildare the mean FTB house price in 2018 was €296,656, a 61% growth between 2013-2018, compared to 56.4% for the State as a whole and a State average of €282,505.

It found that, in 2018, the mean (average) gross income of potential first time buyer couples in Kildare was €56,324 and the mean disposable income was €42,122.

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