2 x median industrial wages is a household income of €78k

We've been through that before. Not every household has two full time earners.
If we're generous to you and assume the median is 2x average wages, then there must be plenty of households with >2x median wages to get up to that median, so how many HMOs have owner occupier mortgages? Anyway, even if the households with 2 wages have a median earned income of €78K, and remembering that as well as knowing that plenty of households don't have two full time earners, and that there are also households with proportions of their income deriving from benefits, on significantly less, where does this €100K come from? Even after you've given the figures a generous massage, you're still 22% short.

Average earnings for FULL-TIME employees is €57,384.

Two people on average, full-time earnings will be comfortably able to purchase a €320k property. Remember - houses tend to be bought by couples at a time when both are in employment.

A €280k mortgage is €1325 pcm at 3% over 25 years. This is manageable even if you have just one person in the household on average earnings.



The outrage about affordability is mainly driven by journalists and NGO types, basically people in low-wage industries who all have to live in Dublin.

@Madness the CSO-derived figures I quoted were for one FT and one PT in Dublin. I would assume that most couples are both FT when they apply, the CBI rules give enough breathing space for one to drop down to PT and still afford the mortgage. Or even one be unemployed.

I find it a bit weird on these threads the constant reference to national average wages, but I guess it's probably because the CSO are really bad at producing regional income numbers. Both prices and incomes obviously differ massively between Dublin and ex-Dublin.

Regardless, the question of who affordable homes are targeted at is a good one.

As is whether their sale or resale to investors should be allowed.

Arguably we only need enough demand to drive the necessary construction activity and it doesn't matter who buys them.

There are several relevant statistics other than wages.

One is that average household income (after tax, including transfers) for a household with two people in employment is €63k.

A mortgage approaching €2k pcm is feasible for this household.



The policy solution is just to build 8k monoculture social housing units a year. This will free up HAP and private rented stock for renters.

'Affordable' homes were done in the mid-00s. Lots of people faced prohibitions on selling and letting them even when their family or financial circumstances changed.

Oddly enough, when applying for jobs, I've found no difference in salary offers nationwide, while Dublin (and to a lesser extent Cork) property is significantly more expensive. That said, for me, jobs are concentrated largely in Cork,outer Dublin and nearby large towns in east Leinster, with smaller clusters around Limerick/Shannon and Galway. Beyond that, there's often just one or two single employer towns per county each with a couple of possible jobs, if that. Perhaps they have to offer more to entice people to take on the risk of moving to somewhere with no alternative prospects.

Nevertheless, I agree that somebody needs to build housing for people who can't afford current prices, either by the state paying, or building so much on the open market that the price falls to levels they can afford. Given land and building costs, the latter approach probably requires so much subsidy that it becomes indistinguishable from the first.

That isn't necessarily the case.

New housing is generally constructed to a much higher standard than older housing, so the product ought to be more expensive than average.

Why do average/poor people need to live in the best constructed homes?

I'm not arguing for deliberately building shoddy housing, but we have a large stock of older housing whose price could be lower than the new stuff if there was enough new stuff built.

A bit like cars really. Nobody is calling for manufacturers to build and market a €4000 car in Ireland because that's the budget of a (relatively) poor person*. Older stuff is usually cheaper.

(cars is a bad analogy as there's a large amount of shiny shiny positional Veblen stuff going on, but you get my point)

As to the possible counterargument that new housing is often built in underdeveloped/skangerish areas, well that's a policy problem.

If the government seriously invested in shiny new schools (educate together and so on) and other public facilities around new development, the price premium would be justified and the price of older stuff with crumbling public infrastructure would drop to the point where "average" people could afford it.

You could call this argument "let Ranelagh rot" or whatever.

At the end of the day, the only thing that matters is volume of construction in the right places, not who buys it.

The CSO household survey from 2016: https://www.cso.ie/en/releasesandpublications/ep/p-hbs/hbs20152016/hinc/

IIUC in 2016 the average monthly household income after tax is ~ €4K. So it does seem an average household can afford €1350 per month mortgage. However, only 30% of households are on/above the average.

Therefore I don't think saying an average household can afford it makes it affordable. I would have thought a definition of affordable would cover the opposite. Say top 70% of households: with a disposable income of 2K per month. Would mean half the price of 320K, which if I remember correctly isn't that the cost of build a house minus the 'extras'


From the CSO: