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DUBLIN, Nov. 17 (Xinhua) -- Ireland's first-time-buyer couples spend 21 percent of after-tax income on mortgage repayments, according to a new study on Thursday.
The EBS DKM Housing Affordability Index, compiled by financial institution EBS and DKM Economic Consultants, showed that the average first-time buyer property price nationally was 232,552 euros in August, implying a mortgage of 195,344 euros with an average 84 percent loan to value ratio.
The corresponding monthly mortgage repayment was 1,009 euros which compares with the average monthly rent nationwide of 1,037 euros.
The index is a measure of the proportion of after-tax income required to meet the first year's mortgage repayments for a working couple, each on average earnings of 36,600 euros a year.
It takes into account not just the average property price, but the mortgage rate and the couple's disposable income.
The new study came as new figures from the Central Statistics Office (CSO) showed that the country's residential property prices rose by 7.3 percent at a national level in the year to September.
Economists here attributed the increasing property prices to a lack of supply of houses throughout the country.
"A lack of supply of houses has clearly pushed up prices, particularly in the Dublin area in the past three years, but it is not something that can be rectified overnight. Until this issue is addressed, prices in the capital and its outskirts will likely remain elevated," said Alan McQuaid, chief economist with the Dublin-headquartered Merrion Stockbrokers.
But he said tighter mortgage lending restrictions imposed by the Central Bank of Ireland will help to contain house prices to some degree and will continue to have an impact going forward.
"There are also potential negative impacts from 'Brexit'. Against that, the tax-incentive scheme for first-time buyers announced in the October Budget will keep upward pressure on prices until new supply comes on the market," he said.
"Taking all the factors into consideration, we see house price growth remaining in positive territory on a year-on-year basis for a while yet, with the annual rate of increase set to hold in the 6-8 percent range in the final quarter," he added. Enditem
