These people (Varadkar Donohoe and Murphy) are insane.
This means, of course, that the rest of the properties built on state land in Dublin, Cork and Galway will cost at least €321k per unit. These morons in government probably hope for an average €500k for the ‘non affordable’ bits.
It also means that every chancer of a developer who sells homes in Dublin for more than €320k can advertise them as ‘affordable’…because this nonsense is now official.
The housing crisis has driven the lot of them pure mad at this stage.
So to meet the LTI for a mortgage on one of these ‘affordable’ properties you would need an income of over 80k (and savings of at least 40k to cover deposit and fees), not sure how affordable that seems tot the average person!
It certainly surprised me. If somebody asked me to pull a figure out of my behind for a median 1 full + 1 part time income, I’d have guessed at something like €65K. (say €40K + 25K or €45K + €20K)
€80K assumes two full time incomes at median or a bit above. OK, there are a lot of households that do have this, but is it really the most representative? I would expect something more like 1.5 than 2.
Edit: Actually, that’s median salaries/wages, not incomes. There are plenty of people relying on benefits for a large proportion of income, who will often get a lot less.
Is that €100K a mean household income, a median household income, a mean household earned income, a median household earned income, a mean owner-occupier earned income, a median owner-occupier earned income, or what?
The gulf between €100K and the median industrial wage of about €39K is very odd, considering that there are lots of people on benefits getting much less than that and relatively few people like Luan’s cleaner who find €80K pa in loose change down the back of the sofa.
We’ve been through that before. Not every household has two full time earners.
If we’re generous to you and assume the median is 2x average wages, then there must be plenty of households with >2x median wages to get up to that median, so how many HMOs have owner occupier mortgages? Anyway, even if the households with 2 wages have a median earned income of €78K, and remembering that as well as knowing that plenty of households don’t have two full time earners, and that there are also households with proportions of their income deriving from benefits, on significantly less, where does this €100K come from? Even after you’ve given the figures a generous massage, you’re still 22% short.
@Madness the CSO-derived figures I quoted were for one FT and one PT in Dublin. I would assume that most couples are both FT when they apply, the CBI rules give enough breathing space for one to drop down to PT and still afford the mortgage. Or even one be unemployed.
I find it a bit weird on these threads the constant reference to national average wages, but I guess it’s probably because the CSO are really bad at producing regional income numbers. Both prices and incomes obviously differ massively between Dublin and ex-Dublin.
Oddly enough, when applying for jobs, I’ve found no difference in salary offers nationwide, while Dublin (and to a lesser extent Cork) property is significantly more expensive. That said, for me, jobs are concentrated largely in Cork,outer Dublin and nearby large towns in east Leinster, with smaller clusters around Limerick/Shannon and Galway. Beyond that, there’s often just one or two single employer towns per county each with a couple of possible jobs, if that. Perhaps they have to offer more to entice people to take on the risk of moving to somewhere with no alternative prospects.
Nevertheless, I agree that somebody needs to build housing for people who can’t afford current prices, either by the state paying, or building so much on the open market that the price falls to levels they can afford. Given land and building costs, the latter approach probably requires so much subsidy that it becomes indistinguishable from the first.
As to the possible counterargument that new housing is often built in underdeveloped/skangerish areas, well that’s a policy problem.
If the government seriously invested in shiny new schools (educate together and so on) and other public facilities around new development, the price premium would be justified and the price of older stuff with crumbling public infrastructure would drop to the point where “average” people could afford it.
You could call this argument “let Ranelagh rot” or whatever.
At the end of the day, the only thing that matters is volume of construction in the right places, not who buys it.
IIUC in 2016 the average monthly household income after tax is ~ €4K. So it does seem an average household can afford €1350 per month mortgage. However, only 30% of households are on/above the average.
Therefore I don’t think saying an average household can afford it makes it affordable. I would have thought a definition of affordable would cover the opposite. Say top 70% of households: with a disposable income of 2K per month. Would mean half the price of 320K, which if I remember correctly isn’t that the cost of build a house minus the ‘extras’