The ESRI has called on the Central Bank to relax the rules requiring first time buyers to have a deposit of 20% for any house purchases valued over €220,000. This is having a huge impact on the supply of credit, which in turn means that builders and developers are less inclined to invest and build more houses as potential purchasers are finding it extremely difficult to secure a mortgage. This in turn is resulting in demands for salary increases, causing wage inflation in many companies.
In fact, the Abrivia 2016 Salary survey found that 68% of respondents seeking to buy a new home would be seeking a salary increase as a result of the central bank rules. Another startling finding was that 56% said they would look for a new job as a result of the central bank mortgage rules.
We are currently working on compiling the data for the 2017 Salary Survey and it will be particularly interesting to find out if another year of stringent central bank regulations is resulting in an increase in respondents looking for a salary increase or an increase in those seeking a new job as a result of the mortgage deposit rules.