A joint income of almost €100,000 is now needed just to buy the cheapest new apartment in the greater Dublin area.
This is because it is not financially viable for developers to build apartments to sell to ordinary people.
They can only be built to sell if the apartments are constructed in more expensive areas where higher sales prices are achievable, a new report found.
It costs so much to build high-rise accommodation that 76pc of the units analysed were being funded and would be rented out by so-called cuckoo funds – where investors buy up an entire block of apartments directly from the developer before they hit the open market, pushing first time buyers out of the market.
The Society of Chartered Surveyors Ireland said that a first-time buying couple would require a deposit of €38,000 and a joint income of €98,000 to purchase the lowest-price apartment type.
Affordability remains a critical issue, the society said in an analysis of the cost of building apartments in the greater Dublin area.
The report found that the sales price of the two-bed apartments reviewed ranges from €375,000 for a low-rise, low spec unit in the suburbs, to €569,000 for a medium rise (nine to 15 storeys) high spec apartment in the city.
This means a first-time buyer couple would require a deposit ranging from €38,000 to €57,000, and a combined salary range of €96,000 to €146,000 to afford these, based on Central Bank lending rules.
A couple both earning €44,000 and with a combined salary of €88,000, and a deposit of €37,500, would not be able to meet the mortgage requirements of the lowest-priced apartment, a low-rise suburban unit priced at €375,000.
Just 20pc of all households enjoy earnings of more than €80,000, according to Central Statistics Office figures.
The total cost of developing medium-rise apartments now ranges from €411,000 to €581,000, including Vat.
In contrast, last July the Society of Chartered Surveyors Ireland found the cost of delivering a three-bedroom semi in the Dublin area was €371,000.
Apartment building is so expensive that cuckoo funds are funding their development and then renting them out. The investment funds have been perceived as pushing first-time buyers out of the market, but others maintain that even fewer apartments would be built without their funding.
The Society of Chartered Surveyors (SCSI) compared the viability of the traditional apartments that are built to sell with the build-to-rent model involving investment funds.
There are fewer restrictions on build-to-rent schemes relating to the apartment mix, car parking and size, following changes by the Department of Housing in 2016 and updated in 2018.
SCSI chair Paul Mitchell said pension funds and other investment funds which bought these schemes had made a major contribution to apartment supply.
He said it is so expensive to build high rise that only funds could make their development viable because they can take a long-term view of the asset.
He said it was so expensive to build apartments that “76pc of the units analysed are for rental rather than sale”.