The return to growth in Ireland since 2012 has coincided with a turnaround in the housing market and sustained increases in the price of rental accommodation and asking prices. This growth has significant distributional implications, both between younger citizens more likely to be renting and older citizens more likely to be property owners as well as regionally with housing costs in the Dublin area increasingly diverging from the rest of the country.
This paper assesses both the cost of renting relative to wages and the ease of buying in all areas across Ireland for which data is available. Rather than looking at average growth rates for all property types this paper attempts to match minimally adequate accommodation with various household types whilst comparing affordability and access for younger and older workers. Rent prices are compared to the take home pay of full-time minimum wage earners and the median take home pay of younger and older cohorts of workers whilst the accessibility of the housing market is estimated by the ratio of the cost of the house to annual gross wages.
The data shows that the cost of renting a one-bedroom apartment anywhere in Dublin is at least 50% of the net pay of the median Irish wage earner and as such is a higher proportion for 50% of all Irish employees. For two median earners renting a three-bed semi-d the cost anywhere in Dublin is a minimum of 35% of take home pay. The paper also finds that given central bank rules on lending, getting a mortgage as a first-time buyer for a one-bedroom apartment would be highly unlikely in all but 2 out of 25 Dublin areas considered based on the wages of the median Irish employee. A mortgage for a three-bedroom house or bigger anywhere in Dublin is beyond the reach of two employees earning the median wage in 2017.