Housing unaffordable for first time buyers

New homes for first time buyers now cost 25 per cent more than in 2016, according to a report commissioned by the Irish Home Builders Association.

The Republic of Ireland is not building enough homes for its population. That’s according to the Ernst & Young (EY) report released on 24th August 2020, called Putting Affordability at the Heart of the Housing System.

The last time private housing supply levels were this low was in the 1970s, says the report.

The report states affordability is predominantly an urban issue and that getting enough money together to put up a deposit remains a significant barrier to home ownership.

The time it takes to save for the average deposit ranges from 1.7 years in Kilkenny to in excess of 15 years in Galway City, Wicklow, Waterford City, Cork City and Dublin City.

The average deposit paid by first time buyers is 14 per cent of the property price, with many getting support from parents, the report states.

EY estimates more than 20 per cent of new homes coming on line are one-off builds (read self-builds), 30 per cent are available to purchase for owner occupation (read developer led), 15 per cent made available for the rental market and 35 per cent for social housing.

The report says 21,138 new homes were delivered in 2019, with 2020 looking like it will yield about 17,000 units in the wake of the COVID 19 outbreak.

Yet the report says the country needs between 22,000 and 36,000 new homes built every year up to 2040.

Meanwhile statistics from the Department of Housing show a 21 per cent drop in self-builders (one-off units) filing commencement notices this year compared to last year. In total, approximately 2,500 self-builders have filed their intention to start building their home between January and July 2020.

The Irish Home Builders Association is part of the Construction Industry Federation (CIF).

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