Almost 1,000 prospective homebuyers have applied for just 51 houses costing up to €495,000 in the State’s most expensive “affordable purchase” housing scheme built to date.
Shanganagh Castle, an estate of almost 600 homes near Shankill in south county Dublin, is the Land Development Agency’s first housing development on State-owned land and its largest to date.
Sales of the first phase of homes were announced last month with prices starting at €334,600 for a two-bedroom home.
However, it has emerged the cost of larger, three-bedroom houses will rise to €495,000. This is €20,000 more than the maximum charged for homes in Oscar Traynor Woods in Coolock, Dublin 17, the Dublin City Council affordable purchase scheme that drew criticism for high prices when it went on sale last July.
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The high price of homes in Shanganagh means purchasers can have incomes exceeding €111,000 and still qualify for State housing subsidies.
For those on lower incomes the State will sink up to €165,000 in a subsidy and take as much as a 30 per cent equityin the home.
Unlike the State-subsidised cost-rental scheme, which has after-tax income limits for eligible renters of €66,000 in Dublin and €59,000 elsewhere, the affordable house purchase scheme has no standard income limits. Instead, income eligibility is related to the market price of each house.
In Shanganagh, the most expensive three-bedroom house has a market value of €550,000. The minimum equity the council will take is 10 per cent, leaving the buyer to come up with €495,000. The buyer must have a 10 per cent deposit and a mortgage of four times their gross income, which in this case means the buyer’s income could be up to €111,375.
To allow people on lower incomes to apply, the council will invest up to 30 per cent in an equity stake in the house, which using this formula would involve the council taking a €165,000 stake, the buyer paying €385,000 and having an income of €86,625. However, to widen income eligibility, the council will allow the buyer to contribute an additional €42,500 outside the mortgage process. This would allow buyers with a minimum salary €76,000 to buy the house.
Similar calculations apply for the smaller houses in the scheme. The cheapest two-bed has a market value of €478,000, making it available to a buyer with a maximum income of €96,795 for €430,200 or a minimum of €66,000 for €334,600. In this last scenario, not only does the buyer have to fund a deposit of €33,460 – more than half their income – they would also have to find another €37,140 to make up the mortgage shortfall.
Despite the high prices, the council received 974 applications for the first 51 homes, the highest number of applications yet received for any affordable purchase scheme. At Oscar Traynor Woods in Coolock, 260 buyers applied for the first 16 homes.
While the Shanganagh applications are still being processed, 70 per cent of homes are being allocated on a first-come, first-served basis, with the remaining 30 per cent subject to a lottery.
Of the 597 homes, 91 are being sold through the affordable purchase scheme with the remaining 40, all of which are apartments, due to be offered for sale next year.
The bulk of the homes, 306, will be available for tenants eligible for cost-rental housing – workers earning up to €66,000. Applications for the first 195 cost-rental homes, all apartments, will open next month, with the rest available next year. The remaining 200 apartments will be used for social housing.
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