The Irish Housing Market has been plagued with various issues for decades, but the COVID-19 pandemic has catalyzed these issues and made them even more apparent. A housing crisis is defined as a situation in which the cost of housing – renting or buying – is so much higher than income that the supply of affordable housing is far too low to meet demand. These trends can be seen in the Irish Housing Market today.
Renting in Ireland
For renters in Ireland, there is a constant fear of being evicted and/or rent prices being increased. High rental prices have forced many renters to use their savings to avoid falling behind on their bills. With no savings, these renters struggle to afford buying a home. And, even if some renters can avoid using their savings to pay bills, finding a house at an affordable price that fits their mortgage loan is extremely challenging.
Relationship Status and Buying a Home
Buying a home in Ireland is challenging enough when you can combine your savings with your partner and take out a larger loan given your joint income. However, thejournal.ie explains that individuals with a stable job and above average salary who are looking to purchase a home on their own – without a partner – are dealt an even greater challenge.
In January 2020, the average price for a Dublin home was about €453,000. This amount is also nine times the typical full-time annual salary. For single individuals who are granted mortgage approval and begin the house hunting process, they soon learn that the loan amount that they were approved for is considerably lower than current housing prices.
Because loan amounts are limited to 3.5 times gross annual income – a measure established by the Central Bank of Ireland – many single individuals looking to purchase a home are effectively locked out of the Irish Housing Market.
Even individuals in a relationship looking to buy together, thereby combining their savings and incomes, struggle to find housing they can afford. But those looking to buy on their own face an even steeper challenge.
Tips for Single Individuals
To make home-buying possible, single individuals can try to get a loan from their family. Buyers can also go to their bank and apply for an exemption to try and get a larger mortgage loan. These options may increase the number of houses that are within budget.
Purchasing a home is difficult. But for those looking to buy on their own, the search to find a home that is on budget is even more challenging.