It is cheaper to buy rather than rent a house in County Clare, a scenario that would still prevail if current interest rates increased by 2%.
This is outlined in a review of the residential property market by PIBA, the country’s largest group of financial brokers.
PIBA also said the Central Bank’s excessive lending restrictions, along with the shortage of suitable properties to buy are creating “a lost generation robbed of the opportunity to buy their own homes”. This is a legacy likely to follow them down through the years in terms of their financial status, Rachel McGover, chief operations officer at the organisation, added.
PIPA, which represents 900 member firms throughout the country said, “This week’s Daft.ie rent report for Q2 2016 provides the latest evidence that in several locations across the country it is cheaper, in some cases considerably so, to buy a property than rent one.
“In what should be startling evidence for policy makers and the Central Bank, even allowing for a 2% rise over current interest rates, in very many cases it would still be cheaper to buy than rent. This is an absolute travesty for those in the 20s and 30s age cohort especially,” she said.
Ms McGovern cited Clare, Louth, Meath, Laois, Roscommon, Kilkenny and Wexford , as examples of areas in which it would still be cheaper to buy than rent , even if interest rates were to increase by 2%.
“In highly sought after areas like Dublin 2, it would only be marginally more expensive to repay a mortgage than rent. A three-bed house with the 2% stress test margin would involve a mortgage repayment of €2,338 while the current rental level for such a property is €2,097. In Dublin 9 it’s €1,700 and €1,561 respectively.”
Ms McGovern said in Ireland and internationally home ownership has formed an important element of financial planning.
“Home ownership has always been an important contributory factor towards growth in personal wealth over the longer term. That is particularly the case where house prices have dropped considerably and interest rates are at low levels. Home ownership once achieved at affordable prices, underpins sustainability and good financial planning.