Limerick beats 366 cities on house affordability

To the evident bemusement of local estate agents, Limerick has been declared the most affordable place to buy a home.

In a survey of 367 cities across nine countries – Australia, Canada, China (Hong Kong), Ireland, Japan, New Zealand, Singapore, the United States and Britain – the Munster city came out on top, according to Demographia, an Illinois- based consultancy that advocates land use and transport policies that improve living standards and reduce poverty.

Waterford city came second in Demographia's 12th annual International Housing Affordability Survey, followed by eight US cities – most of them in the midwest.

"I wouldn't like people coming to Limerick looking for a home and thinking it was nirvana," remarked a local estate agent, Des O'Malley of Sherry FitzGerald.

The only way the survey made sense, he thought, was if it included sales from the entire county as well as Limerick city. However, according to Demographia, their data came from metropolitan areas only.

Based on a median household income of €51,200, and median house prices of €92,800, buyers in Limerick can secure their home for 1.8 times their income – well below the maximum borrowing limit of 3.5 times income imposed by the Central Bank – making the home of Munster rugby the most affordable place of all.

Demographia cites as its sources for Irish property prices data from the Bank of Ireland, Central Statistics Office, Department of the Environment and the Residential Property Price Register. And while a cursory glance at one online property site yesterday suggested 105 houses and apartments for sale in Limerick city for less than €100,000, and 59 similarly in the Limerick suburbs, Mr O'Malley said the market could not meet current demand.

“We have 750 to 800 clients on our books looking for anything from €100,000 to €1 million and I don’t have the stock for them,” he said.

A three-bed semi in the city would cost €175,000 to €200,000. For the €92,800 referenced by Demographia, buyers would have to look in very rural parts of the county, according to Mr O’Malley.

“Even at that, you would not get a family home.”

According to Demographia, Dublin remains “seriously unaffordable” and is ranked alongside Tokyo and, appropriately perhaps, Las Vegas.

However, if you think things are bad in the capital, try living in Australia. Described by Demographia as “severely unaffordable” in all of the five major metropolitan cities (cities of more than a million people), unhappy home hunters will need at least 6.4 times their income before they can even think of bidding for a mid-range property.

In Sydney, the typical buyer needs 12.2 times their income ($84,600) in order to buy a home. This came second in the overall list to Hong Kong, where you need 19 times the median household annual income of $293,000 to be able to buy a home. Between 2003 and September 2015 prices soared by 370 per cent and the median house price is now $5.6 million, according to the survey.