First-time buyers in parts of Dublin are spending up to 40% of their income on their mortgage.

The finding is part of a new ESRI study examining the affordability of housing in Ireland.

It found a significant urban/rural divide in terms of pricing – with first-time homebuyers in urban markets facing the biggest affordability challenges.

It found that first-time buyers in Dublin, Wicklow, Kildare and Meath are all paying an average of 30% of their incomes on mortgage repayments.

That percentage rose to 42% for those in Dun Laoghaire/Rathdown and 40% in Dublin City Centre.

What share of income would potential first-time buyers spend on mortgage repayments? Image: ESRI

ESRI researcher Kieran McQuinn said the percentages fall off “quite a bit” when you move away from the main urban centres.

“Affordability is at its most acute in the Greater Dublin Area in terms of the amount of after-tax income that households have to pay in order to get onto the property market,” he said.

“That reflects the fact that obviously house procures have grown very sharply in the Greater Dublin area over time.

“What it does then obviously, is it means that people are under greater pressure when it comes to mortgage repayments.”

The ESRI said Government policies aimed at increasing the supply of affordable homes “continue to be critical.”

It said those can be complemented with increased supports for deposits and mortgages.

In a separate study the ESRI examined the sustainability of Ireland’s regional housing markets by comparing the ratio of rent to property price.

It found that Ireland’s property prices do not display signs of unsustainability and are broadly in line with economic fundamentals.