Index shows improvement in affordability for first-time buyers
New figures show the average first time buyer working couple is now allocating 12.6% of their joint income to mortgage payments.
That compares to 26% this time three years ago.
The affordability index from EBS building society and DKM economic consultants shows the average monthly mortgage repayment is now €644.
Its prediction is that the downward trend will continue, with net repayments for those couples expected to fall further, to 12.4% of their income.
“The continuing improvement in affordability levels is very positive for first-time buyers and seems to be encouraging activity from this segment," said Dara Deering, Director of Membership Business, EBS.
However it was warned that house prices still had further to fall.
“Recent signs that the economy is stabilising are unlikely to result in a bottoming out of house prices just yet," said Annette Hughes of DKM.
"Employment growth typically lags economic recovery, particularly after a sharp contraction, implying that uncertainty in the employment outlook can be expected to continue to act as a drag on the housing market."
"In terms of where house prices might settle, if one were to assume an average house price to earnings ratio of around 3.5, this would imply that national average FTB house prices would bottom out at around €136,000, based on income levels used to calculate the affordability index."
