Soaring house prices forcing middle income earners out of cities
First appeared in Evening Echo on 03/04/18
SOARING property prices are forcing low and middle-income earners to leave cities in search of a home, according to a leading UCC economist.
Dr Frank Crowley of the Cork University Business School said that current trends paint a grim picture for those earning the average industrial wage as prices continue to increase and demand remains limited.
A recent report from the Real Estate Alliance shows that prices in Cork city have jumped by more than 3% in the last twelve months, with the average family home now costing €315,000.
In county areas, this is €152,000, a figure which remains out of the borrowing reach of those on an average industrial wage of €38,000 under current Central Bank rules which prohibit borrowing more than 3.5 times the value of a salary.
A property survey by Daft.ie shows that the asking price for one-bed apartment has risen by 13% in the last twelve months in Cork city.
Dr Crowley said that as wages rise, so too will property prices, forcing young people to look beyond cities for somewhere to live.
"Wages are rising and more people are working so I would expect house prices to rise as long as the economy is expanding," he said.
"We do not want a situation where people flee to commuting towns for cheaper housing. It will increase congestion and make us less competitive relative to other cities. The supply of residential land needs to be curtailed in the county and increased substantially in the greater city area."