New homebuyers paying 8 times average income
A new housing report shows that new home buyers are now paying almost 8 times the average annual income.
Its the widest gap between house prices and the average salary in over a decade.
The latest house price report from property website MyHome.ie found that the average home sale in the third quarter of 2022 was €370,000, which is 7.7 times the average income of €48,000.
Report author, Chief Economist at Davy Conall Mac Coille, said that these stretched valuations could be exacerbated by the Central Bank’s decision to ease mortgage lending rules.
“Effectively for the past five, six years the central bank has kept households in check stop them from taking on high levels of debt and held back house prices.
“That’s going to change from today, from today that three and a half times threshold has increased for first time buyers to four time and as first time buyer is able to take on more debt and compete for house prices with that debt that’s likely to drive up or add momentum to house price inflation I think as we goes through the year.
“The central bank itself has estimated the change in the rules could add 8% house prices.”