Dublin house prices are among the least affordable in Europe, with a borrower needing to spend over 14 years of their disposable income to buy a home, according to research from Moody’s Investors Service.

Amsterdam, London, and Paris where it can take between 18 and 22 years of disposable income to pay down mortgages are more expensive still, but Dublin is less affordable than Berlin and Madrid on the Moody’s scoreboard.

It said the cost of an average 70 sq m home in Dublin, at €233,460, is more expensive than the €214,550 cost in Rome and Lisbon’s €192,000.

Average Irish prices are nonetheless cheaper than the €665,000 cost in Paris and London’s £460,340 (€521,910).

And house buying has become much more expensive in major European cities.

“Since 2012, rapid house price inflation in certain major European cities has been outpacing residents’ income growth, lowering affordability, especially in Amsterdam, Paris and London.

"Consequently, prospective first-time buyers are either postponing or abandoning their plans to buy a property in a major city, leading to greater demand for rental accommodation in urban areas or purchases in commuter towns,” the ratings firm said.

“In major European cities, house prices have been appreciating since 2012,” said Antonio Tena, a senior analyst at Moody’s.

In 2018, prospective buyers needed on average 15 years’ worth of disposable income to acquire a property without a mortgage, compared with approximately 12 years in 2005-07.

"Affordability in the cities that Moody’s examined was more stretched in Paris, Amsterdam, and London. In these three cities, an individual would need more than 18 years of average disposable income to acquire an average property,” he said.

Rents have risen in the major cities too, which on the flip side could safeguard homeowners from a property price slump.

“In the coming years, we expect housing affordability will worsen in Paris and Amsterdam, given construction restrictions and growing populations. Affordability in Dublin will slightly improve given current strong labour market conditions, which will boost wage inflation,” according to Moody’s.