The average home buyer will need an income of close to €90,000 by 2023 in order to afford a home.
That's according to a new report from Goodbody economist Dermot O'Leary.
In his report on the Irish housing market, O’Leary is forecasting continued price growth not just in the year ahead but in the years ahead. For 2021 he expects prices to rise by a significant 12.5 per cent, followed by a further 5 per cent in 2022 and 4 per cent in 2023.
Such projections would add €63,366, or 22.5 per cent, to the cost of an average home in Ireland, bringing it up to €343,729 by 2023, up from €280,363 at the end of 2020.
For a first-time buyer this would add €6,336 to the average deposit – or double that for a trader-upper, who’ll need a 20 per cent deposit. Not only that, but to secure the average home a potential buyer would also need their salary to grow by about €17,000 between now and then, to reach an income, combined or otherwise, of €88,387. This is based on the Central Bank of Ireland’s multiple of 3.5 times income.
So that could mean that a salary of almost €90,000, plus a deposit of at least €34,300, will be required just to buy the average house in Ireland.
While forecasts can be wrong, O'Leary's price estimates are based on a sharp increase in supply.
In 2020, 20,535 homes were built but by 2023 his forecast is for an annual outturn of 30,752, an increase of 33 per cent.
“Demand conditions remain strong, home prices continue to rise, and Government policy is supportive through homeowner supports and increased public housing output,” he writes.