Homeownership collapses as costs now classed as ‘severely unaffordable’

Homeownership collapses as costs now classed as ‘severely unaffordable’

Homeownership has collapsed among working-age adults, with housing costs now classed as “severely unaffordable”, according to a new report from the Parliamentary Budget Office (PBO). 

The report published by an independent wing of the Oireachtas said house prices increased by 77% between 2012 and 2020, while rental accommodation availability is at its lowest levels since the Celtic Tiger.

The PBO published the second of its two-part series on the housing market, this time looking at affordability.

While house prices increased by over three-quarters between 2012-2020, wage growth was just 23% in the same time period.

During the Celtic Tiger era, house prices increased by an average of 12.6% per annum. In the 12 months to October 2021, house prices rose by 13.5%, with growth now outstripping the boom years.

While Dublin properties were, on average, 1.55 times more expensive than house prices nationally, this could be shifting.

“However, this trend may be starting to shift as potential purchasers are priced out of the Dublin market and look to commuter counties, as was seen in the past,” the report said.

Strong demand means that asking prices for homes are rising fast, with prices outside of Dublin accelerating faster than in the capital.” 

On the issue of mortgage lending, the PBO said that following a significant slowdown in 2020, mortgage market activity rebounded in 2021.

For those who could still work during the pandemic, and while society was largely shut down, it resulted in a shift from consumer spending to savings, it said.

While this saving may have helped some raise enough for a deposit, it has also pushed up house prices.

Rising rents, meanwhile, are “delaying the purchasing of a home”, the PBO said.

“This is best illustrated in the decline in people aged 30 or under buying a home, falling from 60% in 2004 to 27% in 2020,” it said, adding that rents have more than doubled in Dublin in the past decade

Read More

No Comments Yet

Leave a Reply

Your email address will not be published.