Where to find affordable new homes for first-timers
In a market where house prices are rising with every new development phase, we scour the schemes for family homes at €300k to €315k DUBLIN
WHERE exactly are the ‘affordable’ homes located for young city dwelling couples? In a market where new homes within the purchasing range of first-time buyers have been reducing to the point of scarcity, our special report published here today scours the new schemes to find those which offer homes within mortgage range and driving range for those based in our cities. We have included the main commuter regions also. First off, we need to determine what price can be considered affordable?
Michael Dowling of Dowling Financial, crunched the numbers to determine what an average-earning couple such as a teacher and a garda could afford to spend in the new homes market, with a gross income of €35,000 each.
This couple is limited, under Central Bank rules, to a mortgage of 3.5 times their income, so they can borrow €245,000 at most, unless they can get an increasingly rare exception from a bank. They need to stump up a 10pc deposit of at least €24,500, taking them to a spend of
€269,500.
Some 40pc of Dowling’s customers get a gift worth an average €30,000 from their family — though the broker has encountered a first-time buyer receiving €300,000 to put towards their first home. Assuming the nurse and garda are fortunate enough to receive €30,000 from their respective families, they could afford a house worth €300,000.
But under the Government’s help-to-buy scheme, they are entitled to a 5pc tax rebate on a new-build property, which in this case is worth €15,000, so they can start searching for a two or three-bed priced at €315,000. This ties in exactly with the magic ‘affordable’ threshold recently arrived at by a state wide study. So our hunt will be for homes roughly in the €300k to
€315k range.
The average sale price of a three-bed semi rose by €2,000 in the first quarter to €440,000, after jumping 12.5pc in 2017, according to the Real Estate Alliance Average House Price Index.
Anecdotal evidence shows new houses have increased in tandem with overall market prices, because of a continuing shortage of development land, a fast-growing economy and population, and rising labour costs. Development and construction companies are finding it increasingly difficult to recruit both skilled and unskilled labour. That’s because, according to the Construction Industry Federation, more than
100,000 construction workers emigrated during the recession to countries such as Australia, Canada, the US, New Zealand and the UAE. And when these workers decide to return home, they are finding that qualifications they gained abroad — and even their driving licences — are not recognised here.
As a result of these myriad factors, first-time buyers on a budget of between €300,000 and
€315,000 are finding it more difficult to find a new-build within the confines of Co Dublin and Cork city.
Developers facing rising labour costs are aware of the constraints put on their target audience by Central Bank lending limits and try to price starter homes accordingly, says Ivan Gaine, a director with Sherry FitzGerald who heads up its new homes division. He says 40pc of the 900 new homes the agency sold in the first five months of the year cost less than €350,000.
“There is a pinch point, because the help-tobuy scheme is putting manners on inflation in the middle market,” he says. So where can our stereotypical garda and teacher afford to settle down on a budget of less than €315,000?
Most startling of all, there were so few new family homes available in Galway City at this price range that we had to omit Galway on the grounds of not enough available data. Sherry FitzGerald says there may be properties costing
€315,000 or less in the first phase at Doire Fea when it’s released in the autumn. The scheme of
50 three and four-bed homes is being built in the village of Moycullen, about 10km from Galway city. But that’s it. First we look at the prospects for new home buyers from Dublin and its commuter counties, the most expensive market of all. Damien Dillon of Dillon Marshall New Homes, says: “You won’t get a three-bed in south Co Dublin for less than €450,000. You have to go to west or north Dublin to find prices around the €300,000 mark, so you’re talking Lusk, Rush, parts of Swords, Balbriggan, and Adamstown.”
But there are still some schemes in the Co Dublin area that offer starter homes for a
€315,000-budget. At Muileann, an Ardstone Homes development located between the villages of Swords and Kinsealy, a tranche of 27 two, three and four-bed homes was released for the third phase of the scheme. While the three-bed terraced styles might be out of reach for first-time buyers on the average industrial wage who don’t have a helping hand from the Bank of Mum and Dad, they can purchase a two-bed semi at Muileann for
€305,000. In the north Co Dublin coastal town of Balbriggan, prices for a two-bed terraced house at Glenveagh Taylor Hill started at €255,000 when agents released the second phase of the scheme at the end of May. Still in Balbriggan, at Castleland Park Drive, a scheme near the Millfield Shopping Centre, Crean Estates has been selling the last 1,205-sq ft, A2-rated three-bed semis for
€290,000.
First-time buyers house-hunting in the seaside village who can stretch their budget to €320,000 could get a four-bed detached home at Hampton Gardens, along the Naul Road.
Some 12km south, at The Forge in Lusk, Dillon Marshall is selling two-bed homes for €295,000 and three-bed terraced properties for €320,000. In the village’s Skerries Road, McGarrell Reilly is selling three-bed semis from €315,000. These homes are fitted with custom-designed Irishmade fitted kitchens.In the rural north Dublin village of Garristown, near the Meath border, Quillsen has listed an upcoming development called Garristown Orchard on Daft.ie, with starting prices of €290,000 for a four-bed semi while in the south-west Dublin village of Newcastle, three-bed end-of-terrace houses have starting prices of €320,000 at Aylmer Heath.
Cúil Dúin in Citywest, a five-minute walk from the Saggart Luas stop and beside the Citywest Hotel, directly targets first-time buyers seeking a property within the Co Dublin border. Threebed terraced homes are selling in the region of
€315,000, according to Daft. Passive building principles were adopted throughout the design, so buyers will have the benefit of low utility bills.
In Kiltipper in Dublin 24, DNG New Homes will be launching the next phase of Elder Heath in early July. The tranche will comprise 25 two and three-bed houses aimed at first-time buyers. While starting prices have yet to be confirmed, they are expected to range from €265,000 to
€270,000 for a two-bed terraced house measuring 883 sq ft.
Prices for the three-bed mid-terraced and endof-terrace styles are likely to go from €295,000 to €315,000. The A-rated homes at the scheme, located at the foothills of the Dublin Mountains, will be fitted with custom-designed contemporary-style kitchens. With such a dearth of new-builds in the price bracket of first-time buyers, it’s no surprise they are looking towards commuter counties, which experienced an 80pc increase in the building of new homes in the first three months of this year, according to Goodbody Stockbrokers’ figures.