Can you afford to buy your first home?

How much would you have to earn in order to get on the property ladder...

If you're a single first-time buyer, you would need to be earning close to €62,000 a year to pay for the average Irish home.

According to the latest survey from MyHome.ie, the average house will now set you back close to €240,000.

That's an increase of €12,000 on the last quarter, representing a 5% increase in the first three months of 2017 alone. MyHome.ie found that the annual rate of inflation in the market has surged to 9% nationally, and over 10% in Dublin.

With that in mind, Newstalk.com looked at what the rising costs would mean for people's prospects of realistically being able to meet mortgage repayments on properties in their area.

Using current Central Bank lending rules for a 90% mortgage, with an allowance of borrowing 3.5 times your earnings, the figures show that even if you can cobble together a 10% deposit while renting and avail of the first-time buyers scheme, it will be a monthly struggle for many in the long-term. 

The predicament for young prospective buyers who aren't living with their parents is how to save while shelling out a significant amount every month just to keep a roof over their head. 

The average national rent for private residential properties stood at €986 per month for the final quarter of 2016, according to a report released by the Residential Tenancies Board (RTB) last week.

Dublin

Inevitably, Dublin homes continue to be the most expensive at €347,000. For the average house in the capital, a first-time buyer would need to be making almost €90,000 per annum. That's after saving for a deposit of nearly €35,000.

For a couple, it means that both people would have to be earning nearly €8,000 more than the average industrial wage (measured at €37,097 in 2016) each.

Using the mortgages.ie advanced calculator, you would be looking at monthly payments of €1,402 at best, based on a 30-year mortgage on a variable rate (paying off the capital as you go).

Considering the length of time it now takes to save for a deposit, the duration of the mortgage means most would be paying it off for the majority of their working lives.

The average price of a 3 bed semi-detached, the most popular house type, in Dublin is now €290,000.

This would require annual earnings of just over €74,571.

The cheapest monthly repayments would likely find you shelling out approximately €1,172 for a variable product with a 30-year lifespan.

Beyond the capital


The most expensive 3-bed semis outside Dublin continue to be found in Wicklow.

A first-time buyer would have to be on an annual €73,285 to be able to meet the repayments on an average €285,000 home in the Garden County. The cheapest monthly repayments would come in at roughly €1,150.

In Cork city, the average home is now €235,000.

That will take earnings of over €60,000 to keep a set of keys in your hand. The cheapest mortgage repayments you can expect are in the region of €949 per month.

You'll need to make close to €58,000 to buy the average €225,000 home in Galway city. Monthly repayments would be at least €909.

Best bets

If you're wondering at this point where the bargains are to be found, properties in Longford and Roscommon continue to represent the best value.

The average 3 bed semi in Longford will set you back €70,000.

That means an income of just €18,000 will cover your costs. Monthly repayments could be as low as €283.

In Roscommon, the same size house is €75,000 on average.

For that, you'd be required to have gross income of roughly €19,286 and be looking at as little as €303 per month.

These estimates do not take into account numerous factors a lender will look at when assessing your viability - for example, banks will take into account any existing loans you have out, as well as your monthly expenditure on everything from gym membership to Netflix. It is also significantly more difficult to secure a mortgage if you are a single person looking to buy.