First-Time Buyers Earning Over €100K Still Struggling To Buy In Wicklow

A couple earning over €100,000 would struggle to afford a new home in many areas including in Co. Wicklow.

Affordability challenges for first-time buyers mean a couple earning €107,000 would struggle to afford a new home in many areas including in Co. Wicklow.

The SCSI said such a couple will only be able to buy in one of five locations it examined while in Wicklow and Kildare where they would face significant shortfalls.

The deficit is €65,000 in Wicklow for a three-bed despite the Help-to-Buy scheme, providing up to €30,000 according to SCSI 

Estate agents who are members of the Society of Chartered Surveyors Ireland (SCSI) expect national property prices to increase by an average of 5% over the next twelve months, a slight reduction from the 6% forecast in January.  

According to the latest SCSI Residential Mid-Year Market Monitor, over half of agents believe the key factor influencing house prices over the next 12 months will continue be the supply – or more accurately the lack of supply – of new housing.  

Eighty-eight per cent of agents believe current residential property prices are expensive or very expensive – up 5% since January – while just 12% believe they are currently fair value.

When asked where they believe we are in the market cycle, 60% of respondents believe prices are increasing but will level off soon – while 18% believe they have peaked and should start to decline. 

Estate agents expect national property prices to increase by an average of 5% over the next 12 months   

• 70% of agents report low stock levels – over half say the lack of supply is the main driver of price inflation 
• 88% of agents describe current residential property prices as expensive or very expensive – up from 83% in January
• 60% believe prices are increasing but will level off soon – a further 18% believe they have peaked 
• The report found that affordability challenges have intensified) for first time buyers around the country
• A couple on a combined income of €107K who want to buy an averagely priced new 3 bed semi-d and have the 10% deposit will afford to buy in only one of five locations 
• In the two most expensive counties, Wicklow and Kildare, the couple will face shortfalls of €65,000 and €22,000 respectively for that house type

SCSI says widening affordability gap a ‘mounting concern’ 

Gerard O’Toole, President of the SCSI, said the report indicated mounting concern over the supply situation and by extension with a recent slowdown in home construction.

“Fifty-one percent of agents in our survey cite lack of supply as the main factor driving price inflation, up from 46% a year ago. In 2023, the figure was 35%, so we can really see the impact the lack of supply is having on house prices. At the same time, 70% of agents are reporting low stock levels of new and second-hand homes, again underscoring the persistent challenge of limited supply in the market.”

“Over the past five years more than half of agents have consistently highlighted low stock levels, stressing that constrained supply remains a fundamental issue impacting the market.”

 “With the ESRI forecasting that 37,000 new homes will be built this year, well short of the Government’s target of 41,000, the urgent need to address infrastructural shortcomings and for the Housing Activation Office to become fully operational as soon as possible cannot be overstated.”

“The other main factors, which our members believe are influencing price movements include the state of the economy (20%), while a further 16% said the continued availability of government support schemes such as Help to Buy and First Home Scheme are influencing house prices.”

“Eighty-eight per-cent of agents believe property prices are expensive or very expensive, the highest figure ever recorded.  We have had 12 years of continuous price growth and the level of increases we have seen in recent years is just not sustainable.”

“Looking at where we are in the market cycle, 78% of agents believe prices will level off soon or have already peaked. In the medium to long term, the only way to ensure prices stabilise is to ramp up supply” Mr O’Toole said.

Current Affordability Scenarios   

With property prices nationally having increased by 164.8% from their trough in early 2013, according to the CSO*, the SCSI included five scenarios involving a couple’s earning a combined income of €107,000 in the latest monitor. The scenarios demonstrate the affordability gap, if any, which exists between the total mortgage purchase limit available to a couple on a garda and nurse income** looking to buy their first home based on average new house purchase prices in five different locations.  

A couple on a combined salary of €107K who want to buy a new privately built 3-bedroom semi-detached home and who have the 10% deposit having availed of the Help to Buy Scheme along with their savings, will afford to buy in only one of the five locations, namely Cork.

The case studies indicate prospective buyers in Wicklow will face a shortfall of almost €65,200 while in Kildare the figure is €22,000. Gerard O’Toole said, the new figures show that affordability has become more challenging across various house types and locations.

“While a new 3-bedroom semi-detached home is affordable in Cork and buyers with additional savings beyond the 10% loan-to-income limit should be able to overcome the gap in Meath and Galway, new 3-bedroom semi-detached homes in Wicklow and Kildare remain totally out of reach for people on these salaries. In addition, there are thousands of people on lower salaries who will not be able to buy and will require support.”

“This year we’ve included an affordability scenario for two and three-bed terraced houses in all five locations. The picture here is a good deal more positive, with affordability being met in nearly all locations, although the couple would require some additional savings in Kildare and Wicklow in order to buy a three-bed terraced home.

“These findings highlight the persistent structural barrier which exists to homeownership, even for dual-income households in stable public sector roles. It also underscores broader concerns around housing sustainability, increasing commuter burdens and the potential impact on quality of life.”

“The lack of new home building across several regions is something many members commented on in our report. This is something the Government needs to address through various measures including targeted supports to unlock brownfield sites. If we are to move the supply dial, we also need to see compact growth targets set for local authorities with regular reporting requirements on planning approvals and completions.”

“While the increased budget for housing and key infrastructural projects announced last week in the revised National Development Plan is most welcome, the success of the plan will be measured by target delivery.  That is the litmus test of any plan,” Mr O’Toole concluded.