Is It Cheaper to Buy or Rent? A Look at Housing Affordability for First-Time Buyers in Ireland


When it comes to housing affordability for first-time buyers, the decision to buy or rent can be a complex one. Nationally, it is currently cheaper to buy a new dwelling than to rent. In the third quarter of 2024, the average monthly rent across the country was €1,955, while the required monthly mortgage repayment for a new dwelling was €1,723. This calculation is based on a median new house price of €400,000 for the 12 months leading up to November 2024.

Regional Variations in New House Prices

The highest median new house prices for first-time buyers were found in Dún Laoghaire-Rathdown (€653,175), followed by Dublin City (€609,699) and South Dublin (€472,500). All seven local authorities that make up the Greater Dublin Area (GDA) are among the top 10 most expensive regions for new house prices in the country. On the other end of the spectrum, Leitrim had the lowest median new house price at €195,000, followed by Cavan at €295,000.

Comparing Rent and Mortgage Payments

Using data from the Central Statistics Office (CSO) and the latest average market rent from the Daft.ie rental report, it is evident that renting is more affordable than purchasing a new dwelling for first-time buyers in 13 out of the 31 local authorities. For instance, in South Dublin and Cork City, the average monthly rent payments exceed the average monthly mortgage repayments by €506 and €403, respectively.

Affordability of Existing Dwellings

First-time buyers looking to purchase an existing dwelling are in a better position from an affordability perspective. The average monthly mortgage repayment for existing dwellings across the state is €1,390, which is €565 less than the average monthly market rent. The highest median existing house prices for first-time buyers were also in Dún Laoghaire-Rathdown (€542,250), followed by Dublin City (€419,625) and South Dublin (€398,250). The Greater Dublin Area continues to dominate the list of highest house prices. In contrast, Longford had the lowest median existing house price at €180,750, followed by Donegal (€177,000) and Leitrim (€234,250).

Household Income and Affordability

Household income plays a crucial role in determining affordability for first-time buyers. The state median household income in 2024 was approximately €61,362. However, this amount is insufficient to afford the median new or existing house prices in the state, based on a 90% Loan-to-Value ratio. In Dún Laoghaire-Rathdown, the median household income was €89,764, the highest in the country. Despite this, households in this area faced significant income gaps, requiring an additional €57,200 to purchase a new dwelling and €32,242 for an existing dwelling. The highest income gap for new dwellings was seen in Dublin City, at €73,056.

While it is generally cheaper to buy a new dwelling than to rent on a national level, regional variations and household income disparities significantly impact affordability. For existing dwellings, it is more affordable to buy than to rent in all local authorities, highlighting the importance of considering both new and existing housing options when making a decision.

For more residential property insights, check out the latest GeoDirectory Residential Buildings Report.

 
Posted: 11/03/2025 16:21:22