A couple now need a joint income of €107,000 and to avail of the Help to Buy scheme for their 10% deposit to buy a three-bed home in commuter belt areas, a report shows, writes Sarah Slater.

Estate agents expect property prices to rise by 6% over this year, while 83% say property prices are “expensive or very expensive”, according to the latest Society of Chartered Surveyors Ireland (SCSI) Annual Residential Property report.

Three out of four selling agents’ stock levels are low and 60% believe the lack of supply is the main driver of price inflation.

The SCSI included five scenarios for a couple earning a combined income of €107,000 and availing of the Help to Buy scheme towards their 10% deposit in its latest report, which features affordability scenarios for counties Cork, Galway, Kildare, Meath and Wicklow.

A couple on a combined income of €107,000 who want to buy a new three-bed semi and have the 10% deposit would only be able to afford to buy in three of the areas.

In the two most expensive counties, Wicklow and Kildare, couples will be short €35,500 and €14,000, respectively.

SCSI vice president Gerard O’Toole described the current rates of property inflation, of around 10%, as unsustainable.

He said: “Given the affordability challenges facing all buyers, particularly first-time buyers, a slowdown or period of market stabilisation would be most welcome.”

Mr O’Toole also stated that supply will remain the dominant issue until annual completion levels are ramped up to 40,000 plus.

A year ago, 40% of agents said the lack of supply was the main price driver, and this has risen to around 60% now.

The other main factors that the SCSI believes are influencing price movements include lower interest rates and the availability of credit (12%), access to schemes supporting house purchases such as Help to Buy (8%), and changes in the state of the economy (8%).

More than half (53%) of agents report a slight improvement in credit conditions and believe this was the main factor impacting the higher-than-anticipated price movements in late 2024.

“Our survey responses suggest agents believe that there will be a shift towards more balanced growth expectations with less emphasis on rapid price increases,” Mr O’Toole highlighted.

He also said analysis of trends across the five counties, Cork, Galway, Kildare, Meath and Wicklow, indicate that rising prices are making affordability more challenging.

He added: “These trends suggest that the pace of property price growth is higher than income growth in several regions...

“While the housing market remains active and resilient, there is a growing need to address these emerging affordability concerns.”

Mr O’Toole also indicated that in addition to the higher housing densities, a broader integrated housing mix which better reflects “the needs of modern society will be required.”