herald

Thursday 14 November 2019

Couples have to earn €108k-a-year to buy 'affordable home'

Couples will need to have savings of up to €42,000
Couples will need to have savings of up to €42,000

Individuals or couples will have to earn at least €108k-a-year and have savings of €42,000 to buy a category of 'affordable' homes in the O'Devaney Gardens redevelopment.

The Dublin City Council definition of what constitutes an affordable property at the site has been slammed by local representatives.

Council deputy chief executive Brendan Kenny has insisted the publicly owned land wasn't being "given away" to private developer and preferred bidder Bartra Capital, the firm behind the controversial proposed co-living facility in Dun Laoghaire.

At the top end of the "affordable" scale in O'Devaney Gardens, a three-bedroom apartment will cost €420,000 and this includes a discount of up to 40pc on what is considered market value.

Cheapest

Central Bank lending rules mean a first-time buyer can only borrow 3.5 times their salary and must have at least 10pc deposit. CSO figures show that only 14.1pc of all households have an income over €100,000.

The cheapest affordable properties at the site, two-bedroom houses, will still cost at least €270,000, meaning a household will have to earn almost €70,000-a-year to buy one.

Public representative Eilis Ryan has criticised the pricing and said it excluded "the overwhelming majority of Dublin households".

"Meanwhile, the unsubsidised housing will be some 40pc more expensive, putting it out of the reach of all but the elite and landlords. This is an atrocious waste of public land and money," she said.

"The rationale here is that increasing supply will drive down house prices elsewhere. But we saw repeatedly during the Celtic Tiger that house prices escalated even during times of over supply.

"There is zero public gain from the plan which councillors will vote on in October. It should be scrapped and replaced with public, cost rental housing on the Vienna model."

However, Dublin City Council defended the pricing. "Even at €420,000 it will represent a very significant discount in comparison to market prices," a statement to the Herald said.

Defended

The council said generally affordability is in line with the National Rebuilding Ireland Home-Loan system, what a single person with a maximum of €50,000 can afford to buy and €75,000 for a couple, and depending on what size of a deposit can be made.

"It is possible that these income limits may change before the 'affordable homes' are ready for sale and the national affordable housing is not yet fully finalised," it said.

"At this early stage we are giving a price range but in the months ahead we will be in a position to clarify such prices further."

The cost of the development including 769 homes - 56 are already in construction by Careys Construction for a total of 825 units - has been estimated at €300m.

Barta could sell the 411 private properties planned at the development alone for €137m.

O'Devaney Gardens was a flat complex developed close to Phoenix Park in Dublin in the 1950s.

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