First-time buyers are still not tempted by cheaper houses...
HOUSES are now more affordable than they have been in a generation -- but few first-time buyers are tempted to buy, new figures show.
House prices have fallen so sharply that it takes just more than 12pc of an average first-time-buyer couple's income to repay a mortgage, the EBS/DMK housing-affordability index shows.
But despite the continuing drop in affordability, the number of new buyers jumping on the property ladder is a fraction of the level it was during the housing boom.
National average house prices are still falling and are predicted to drop below €140,000 over the next year.
A major reason for the lack of demand in the housing market is the continuing falls in rents.
Another set of figures released by Daft.ie yesterday showed that rents fell again in the past few months, as there is a glut of rental properties.
The latest housing-affordability index found that the average first-time house-buyer couple are paying 12.6pc of their joint income in mortgage repayments, compared with 26pc three years ago.
The index shows that the average new-buyer couple were paying €644 a month in mortgage repayments in April.
This is down from €1,323 a month that the same couple would have paid at the height of the boom in December 2006.
Economist Annette Hughes of DKM Consultants said affordability was at its highest level in a generation.
She said average house prices had fallen from a peak of €360,000 in December 2006 to just under €200,000.
However, she predicted that the average price nationally would come down to less than €140,000 over the next year.
Repayments
The affordability index measures the proportion of after-tax income required to meet first-year mortgage repayments for an 'average' working couple -- each on average earnings and with a 90pc mortgage.
It takes into account mortgage rates, changes in the level of mortgage-interest relief and is based on average earnings and average first-time-buyer new house prices.
Recent figures from the Irish Banking Federation showed that just 2,300 first-time buyers took out mortgages in the first three months of this year.
This compared with almost 10,000 first-time buyers taking out a mortgage in the autumn of 2006, when the housing market was ballooning.
Mortgage brokers said yesterday that new buyers were finding it almost impossible to get approval for a mortgage.
Chief executive of the Irish Brokers Association, Ciaran Phelan, said it "has never been more difficult to get a mortgage in the Irish market."
He said new buyers were being deterred from buying by lenders demanding that they have a large deposit.
Meanwhile, figures from property website Daft.ie yesterday indicated that residential rents fell by 0.5pc in the first three months of this year, with the average nationwide rent now standing at €760 per month.
Rents in Dublin have fallen by 14pc in the past year, by 12pc in Cork and by 13pc in Limerick. Ronan Lyons, an economist with Daft, said there were signs that the rental market was stabilising.
Report by Charlie Weston - Irish Independent
HOUSES are now more affordable than they have been in a generation -- but few first-time buyers are tempted to buy, new figures show.
House prices have fallen so sharply that it takes just more than 12pc of an average first-time-buyer couple's income to repay a mortgage, the EBS/DMK housing-affordability index shows.
But despite the continuing drop in affordability, the number of new buyers jumping on the property ladder is a fraction of the level it was during the housing boom.
National average house prices are still falling and are predicted to drop below €140,000 over the next year.
A major reason for the lack of demand in the housing market is the continuing falls in rents.
Another set of figures released by Daft.ie yesterday showed that rents fell again in the past few months, as there is a glut of rental properties.
The latest housing-affordability index found that the average first-time house-buyer couple are paying 12.6pc of their joint income in mortgage repayments, compared with 26pc three years ago.
The index shows that the average new-buyer couple were paying €644 a month in mortgage repayments in April.
This is down from €1,323 a month that the same couple would have paid at the height of the boom in December 2006.
Economist Annette Hughes of DKM Consultants said affordability was at its highest level in a generation.
She said average house prices had fallen from a peak of €360,000 in December 2006 to just under €200,000.
However, she predicted that the average price nationally would come down to less than €140,000 over the next year.
Repayments
The affordability index measures the proportion of after-tax income required to meet first-year mortgage repayments for an 'average' working couple -- each on average earnings and with a 90pc mortgage.
It takes into account mortgage rates, changes in the level of mortgage-interest relief and is based on average earnings and average first-time-buyer new house prices.
Recent figures from the Irish Banking Federation showed that just 2,300 first-time buyers took out mortgages in the first three months of this year.
This compared with almost 10,000 first-time buyers taking out a mortgage in the autumn of 2006, when the housing market was ballooning.
Mortgage brokers said yesterday that new buyers were finding it almost impossible to get approval for a mortgage.
Chief executive of the Irish Brokers Association, Ciaran Phelan, said it "has never been more difficult to get a mortgage in the Irish market."
He said new buyers were being deterred from buying by lenders demanding that they have a large deposit.
Meanwhile, figures from property website Daft.ie yesterday indicated that residential rents fell by 0.5pc in the first three months of this year, with the average nationwide rent now standing at €760 per month.
Rents in Dublin have fallen by 14pc in the past year, by 12pc in Cork and by 13pc in Limerick. Ronan Lyons, an economist with Daft, said there were signs that the rental market was stabilising.
Report by Charlie Weston - Irish Independent