The latest Irish rental price report has just been released. As always, Ronan Lyons has done great work documenting rental-price inflation.
Rental prices are at an all-time high. But Dublin is clearly diverging from the rest of the country, with what can only be described as rampant and runaway rental-price inflation, which is completely unsustainable.
The media – and housing economists more generally – have correctly pointed out the importance of high-demand and weak supply. In turn, the focus is explaining the weak supply of rental properties: AirBnB etc.
But what about the role of income-demand in driving up rental prices?
Surely, the high-wage ICT sectors of the economy have a role to play in driving up the price of domestic non-tradeables in Dublin city?
The elephant in the room is the role of inward migration, and the impact of non-Irish employment in Dublin’s Silicon Docks.
The two graphs below are taken from my research on FDI flows into the ICT sector. It shows two things: FDI in the ICT sector is central to the Irish recovery, and ICT is the highest paid sector in the economy.
So, who are these workers, and where do they all live?
Google opened it’s offices on Barrow Street in 2004. An additional 80+ Silicon Valley firms have since followed. By 2016, the sector had grown to around 16,000 employees. Most of the growth (labour market cluster effect) is driven by inward-migration of skilled multi-lingual graduates.
Might the Silicon Docks, and the inward migration of high-paid sales/tech workers from across the EMEA, explain the rental-price inflation?
This is not an argument against inward migration, nor the positive effects of Dublin’s high-tech sector. It’s been great. But it has a cost, which policymakers are clearly incapable of responding to: the rapid increase in non-tradeable prices, particularly housing-rental prices in Dublin.
It seems to me that it’s only a matter of time before a populist rhetoric emerges along the following lines: the Irish government use low corporate taxes to lure global MNC’s from Silicon Valley to employ mobile multi-lingual graduates from across the EU/globe, who pay 2,000 euro a month for 1-bed apartments, whilst the Irish serve them pints in the local bar.
Source: Regan & Brazys (2017); IDA and authors calculations.
Source: Regan & Brazys (2017); CSO and authors calculations.
39 replies on “The Silicon Docks and the Housing-Rental Crisis”
QNHS: in the five years to 2016, Dublin saw about 15,000 new jobs in NACE Sector J (Information and communication). The overall increase in employment was about 83,000. So IT broadly defined saw about 20% of the new jobs in Dublin.
I think everyone would agree tech jobs played a role. But without detailed micro-level data (have you requested access to the restricted QNHS from the CSO?) there is no way to tell if it’s 10% or 90% of the variation. You can’t tease that out with aggregate data. Nonetheless, you’re pointedly focusing on 15,000 of the 83,000 people, and in particular pointing to their nationality. Do Irish nurses and plumbers not rent? Your emphasis on the 20% is peculiar to me.
@Enda H
You’re absolutely right that we need better micro-level data.
But to answer your question directly: yes, I think it’s perfectly plausible that the income-effect demand of 15,000 workers could lead to highly-concentrated rental price inflation. It puts upward pressure on prices for everyone living in the city, who have no choice but to pay the same price, including plumbers and nurses. The alternative is move out of the city, which of course, many now do.
The problem is largely a failure of economists in Ireland. Its time they took responsibility. The root cause is total failure to provide accurate predictions of population growth, economic growth and housing demand. That’s what they are employed at great taxpayer expense to do. But, they have failed to do so.
In particular, there has been over the past decade (a) massive over-estimation of the level of net emigration during the recession (b) massive under-estimation of the level of resumed net immigration post-recession (c) massive under-estimation during the recession of the prospects for economic recovery and (d) massive over-estimation of the housing surplus that had emerged during the pre-recession building boom. These failures did not arise because economists are technically incompetent. Rather its because their often hysterical anti-FF, and to a lesser extent anti-FG bias, combined with a ferocious anti-religion bias, induces in them a belief that no sane person would want to live in Ireland. Who could possibly want to live in a country that doesn’t even have abortion, allows its schools to be run by a Church, gives its new maternity hospital to nuns, and insists on parliamentary sessions beginning with a prayer? That’s how they think and you only have to follow Twitter to see it. No dissent from this groupthink is allowed. As a result, they never anticipate the population growth that actually occurs, they never predict the economic growth that actually occurs, and they are forever predicting a return to levels of emigration so huge that any talk of a housing shortage would be ridiculous.
In addition, motivated by hatred FF, they exaggerated by a factor of 10 the surplus of new houses built during the previous boom. NIRSA claimed in 20010 that there were 300k such houses. It was claimed by various economists and commentators that the entire Celtic Tiger was a scam in which the high growth was simply the result of building empty houses. That was George Lee’s and Morgan Kelly’s central allegation,which they repeated ad nauseum in the media for half a decade up to 2010. Indeed, the bold Morgan, among his other many dire predictions, all of which have proved to be totally wrong, claimed in 2010 that the surplus of empty houses was so great and the prospect for emigration so bad that ‘Ireland would have to knock down more houses than it built in the next decade’. This has turned out to be one of the worst forecasts in history. Why isn’t he being questioned about it now? After all his hysterical IT articles between 2006 and 2011, has he nothing to say about the housing shortage that now exists? Ditto for George Lee. Both these erstwhile ‘experts’ on the subject of housing are now totally silent on what is probably the most important issue facing the country. In contrast, the CIF said back in 2010 that, while there was indeed a surplus of houses, it was of the order of 30k, not 300k, and that it would soon be eaten up by population growth. The CIF have been proved completely correct, but such was the level of animosity towards them by the media mob that no one believed their forecasts. The current housing shortage is the result.
@johnthe optimist
“There has been a total failure to provide accurate predictions of population growth, economic growth and housing demand”.
I agree. But I don’t think this is a the failure of economists. It’s the failure of public policymaking, and local government.
I distinctly remember Bertie Ahern telling me in 2009 that Dublin will have a housing supply-side crisis in a couple of years. He was absolutely right.
And how much tax revenue (direct and indirect) are those “goddamn foreigners” (AKA inward migrants/skilled multi-lingual graduates) paying? At 52% marginal tax rate, I think quite a lot.
People want to live in Dublin. The supply is not increasing fast enough, therefore prices go up. Econ 101.
Let’s fix the problem by getting builders building, not by playing the Trump card.
@BrianH
In an ideal rational world, yes. But we don’t live in an ECON101 world, and we should stop deluding ourselves that we do. It’s time to get rid of the idealised 101 assumptions, and replace them with real empirical public-policy oriented observations about the actual world. That world includes vested interests, taxation, messy politics, power relations, debt, finance and banking.
It doesn’t help that Dublin City Council is under far-left control. The last bastion of socialism outside of North Korea. They are more interested in flying Palestinian flags than in building houses. I vaguely recall that decades ago (possibly in the 60s) an FF government minister simply abolished the council and imposed his own commissioner. The current government should do likewise. Appoint Bertie Ahern to take charge of overall housing policy in Dublin and get house-building going again.
Previous DCCs were ran by Labor, FG & FF and those hardly covered themselves in glory.
There’s 63 councillors.
Can you really expect to (i) get high caliber Councillors for €17k a year plus expenses, (ii) get joined-up thinking amongst 8 parties & 12 independents, and (iii) have councillors set development plans designed to accomodate growth in population when it might disadvantage existing residents (noting it is existing residents who vote them in – not future residents).
This post is playing a rather dangerous and noxious game. “I wouldn’t blame the foreigners, but, well, the great unwashed might.”
Cute. A little too cute.
So here’s the deal, I’m one of those tech workers. I moved to Ireland in 1998 and eventually worked in Google’s Dublin offices. And I even rented in that area for a few years. But by then I’d already bought a house in Galway (where I now live). And many of the people I worked with in Google and in other tech jobs have bought houses. Most in Dublin, but some in Athlone, Limerick and Galway.
There’s a chunk of those tech workers not competing in the rental market. And meanwhile I have quite a few Irish friends from outside of Dublin who have moved there for work. Some of them have also bought, but many struggle in the rental market. Don’t assume all those people are renters. A few of are even landlords.
So instead of making cute posts like this where you flirt with xenophobia, maybe it’s a good idea to make good short and long-term proposals.
1) Build local authority housing. Fund the councils to build housing and to more quickly turn housing around. We’ve given private industry years to do it. They haven’t. New plan.
2) Start seriously investing outside of Dublin. Get decent broadband rolled out across the country. Put in light rail in at least one other city in Ireland. Obviously I’d prefer Galway, but Cork or Limerick would make sense too.
3) Raise height restrictions in Dublin. Dublin needs better density to work efficiently. They don’t need to be skyscrapers, but a number of 20 or 30 storey apartment buildings near good schools, public transit and so forth would do wonders in Dublin’s core.
4) Whatever policies will get more disused properties back into use – particularly in city centres – should be pursued.
And in case the current human misery of the housing crisis isn’t enough motivation, the clock is ticking on Brexit. It’s a gigantic opportunity. We’re going to miss it because of this housing disaster.
There is no need for 20- or 30-storey apartment blocks. There are vacant sites all over the greater Dublin area and rolling prairies within sight of the M50. Dublin postal districts 1, 2, 3, 4, 7 and 8 are full of one-story residential terraces. Check it out.
There are also government ministers leading residents’ groups in campaigns against every single development proposal. Prices, and rents, are unaffordable in the Dublin area because this is the revealed preference of politicians. It has nothing to do with multilingual yuppies, it has been going on for the last forty years.
@Colm
“Prices, and rents, are unaffordable in the Dublin area because this is the revealed preference of politicians”.
Indeed, am i correct in saying that almost 40% of politicians own property to rent? The entire public policy regime is to get rents and prices rising – to manage the debt overhang. But these prices can’t go up unless someone is willing to pay. Hence, the observation that the growth model is based on attracting FDI workers, who are in a position to pay exorbitant rents.
Preferences change. Many younger people would like to live within walking distances of their jobs & social lives. How many guys or gals in FaceBook or Google or the IFSC want to live in a 3 bed semi-D in Knocklyn or Portmarnock or Greenhills when they’ve to sit on a bus for an hour into work in the morning? How many want the hassle of owning a car and maintaining a garden?
It has always been this way – the most expensive properties are found in neighborhoods within walking distance of the city (Ballsbridge, Donnybrook, Sandymount, Ranelagh, Rathmines etc)?
The fact there is so much low rise and/or poor quality existing accommodation within a stones throw of the main Dublin streets is the driver of argument for high rise developments – the high rise makes up for the low rise to give a reasonable blended average height. The alternative is to bulldoze all the low rise and build them up to 5/6 stories. Where’s the political will for CPOing inner city dwellings?
Hear, hear.
@KevinLyda
I agree entirely with all your 1-4 points. The real challenges is actually making these happen. This means radically reforming local government and the public administration of housing.
The CSO put out a very useful release last week with loads of FDI stats.
Here is employment in the FDI ICT sector:
2012: 34,701
2013: 35,231
2014: 36,144
2015: 37,533
Change: +2,832
The release also gives total employment in US-owned enterprises:
2012: 109,681
2013: 110,044
2014: 111,574
2015: 115,964
Change: +6,283
The QNHS gives total employment of Irish nationals over the same period as:
Q4 2012: 1,579,700
Q4 2013: 1,626,200
Q4 2014: 1,653,400
Q4 2015: 1,682,200
Change: +102,500
We don’t have the FDI figures for 2016 but the employment of Irish nationals increased by a further 50,000 last year. I cannot see any basis for the “populist rhetoric” proposed in the OP in the above employment figures. OK, maybe it doesn’t need any basis to emerge. Perhaps that is why this is the second time the thesis has been presented here. But people at letting/vending viewings can see who the other prospective tenants/buyers are. And the Daft.ie report shows double-digit rent inflation in all bar five counties.
@Seamus
It’s time to move on from making valid/causal inferences from those macro-CSO data.
Google, alone, employ 5500 workers. 16,000 people work in the sector. Since 2008, almost all of it has been concentrated in Dublin. There has been a significant expansion – with almost 100 new forms locating around Google to feed off their labour market. It’s real.
To make valid inferences, sometimes the quantitative has to become qualitative.
Talk with someone from HR in Google and they’ll admit that approx 80% of their workers are non-Irish. Talk to the IDA and the DJEI, they’ll admit the same. They all know it’s an issue, but don’t want it to become a salient issue in the public domain, for obvious political reasons.
In addition – in the NACE – it’s hard to capture the occupation of most of these workers.
They predominately work in sales/advertising. These firms usually have about a 60-40-20 split. 60 sales (non-Irish), 30 tech (non-Irish), 20 admin (Irish).
Look at Census 2011 data.
In the ICT sector that year there were 1305 people in employment who had been resident outside Ireland one year previously. 753 of them were Irish.
I appreciate the sector was not as ‘hot’ as it is right now, but then there were gross inflows of just over 500 non-Irish into the ICT sector. Presumably there were gross outflows too, but these are not counted. So the net number was even smaller.
This is simply not enough people to make a meaningful impact on the rental market.
Census 2016 data will be out soon which will clarify this a bit more.
Aidan,
You can’t just move on from the data because you want to tell a different story not supported by the data.
Is the employment and earnings in Dublin 2 a factor that explains the level and growth of rents for 1-bed units in Dublin 2? Absolutely. The CSO data show that average earnings in the FDI ICT sector rose from €60k in 2012 to €70k in 2015. The rent of a 1-bed in Dublin 2 has risen 15% in the past year.
But the Daft.ie report shows 15 other areas where the rents of 1-bed units are growing at faster rates. These include Longford, Louth, Westmeath, Laois and Kilkenny. Which foreigners do the pint-serving Irish in these regions point the finger at when venting their populist rhetoric?
There are lots of reasons why our residential property market is the way it is, of which rising rents is just one symptom. But foreign-born workers in the ICT sector would not make the top 10 reasons. Top of the list for me would be insiders versus outsiders. This is a problem which takes many guises. I spent a year seeing it in action in the repossession courts in Cork.
It’s little more than divilment but the Daft.ie report shows only one type of property for only one area which was cheaper than the same time last year. 220 inflation rates and only one of them is negative. You could nearly guess what area that was!
“Surely, the high-wage ICT sectors of the economy have a role to play in driving up the price of domestic non-tradeables in Dublin city?”
Does somebody say they don’t?
The effect on rents is concentrated around the docks and a bit along the Dart. Ask some lettings agents. Who is surprised by this and in how many pubs is it the xenophobia festering? Do you also predict a backlash against foreign bankers arriving in Dublin post Brexit?
On supply, surely it would make sense both to build on Colm’s prairies and allow higher buildings in the city centre.
@grumpy
“the effects of rents is concentrated around the docks, and a but along the dart”
Seriously! You clearly don’t rent in Dublin. The effects has spread right around D1/2/4/7/8. Walk into any bar in Dublin and you’ll hear people complaining about going to see property advertised at 1800 for two-beds, and then some Silicon Dock workers come in and offer 2200, cash in hand. The problem has spread right around the city – Dublin is tiny.
“Walk into any bar in Dublin and you’ll hear people complaining about going to see property advertised at 1800 for two-beds, and then some Silicon Dock workers come in and offer 2200, cash in hand.”
Any bar, and I will here allegations of €400 cash in hand on top – and the offers will have all been from Silicon Dock workers (presumably foreign). Really!
There is a pattern, not new, in Dublin rentals for some (usually foreign) tenants to offer significantly above asking rent in order to cram in lots of people. Most landlords will not play along.
“But what about the role of income-demand in driving up rental prices?”
The neat mathematical relationships between ‘Supply-Demand’, as encountered in the undergrad Economics textbooks, do not hold (or so I believe) at the Margins of both S + D. The Supply issue may be somewhat easier to quantify, but the Demand issue is a lot trickier to deal with – since its an issue of what the consumers (of the rentals) can actually afford to pay out after-tax and other key expenses (commuting cost?) have been discounted out of their incomes. If your commuting cost is low, or almost non-existent, then things may take on a completely different perspective. Now, if you have partners and kids and schools …. It’s all relative, as that man said.
Dublin is geographically unsuited to be a capital city. Its a tad damp to the East. The South has nasty hills. The North and West are bereft of the vital public transport infrastructure required of a metropolis where two/three stories is the Faith. Move Leinster House and its associated outhouses to Baldonnel area. Then see what happens.
@Brian Woods
“The Demand issue is a lot trickier to deal with – since its an issue of what the consumers (of the rentals) can actually afford to pay out after-tax and other key expenses (commuting cost?) have been discounted out of their incomes”.
I agree. Note most of these firms will cover a) food costs, b) transport costs, c) some health/dental insurance d) phone costs. So their workers, in addition to being well paid, generally have more disposable income, which they can spend on rent.
The housing stock depreciates and a commonly used figure is 0.5% per annum, implying the loss of around 10k properties a year. That is why the stock barely grew between 2011 and 2016 despite reported completions of over 50k ( although the latter is open to question but that is another issue) . The population is probably growing now by at least 1% per year, so that means we need to build around 30k new homes a year just to prevent a fall in the housing stock per head, which has been the case now for some time.
As pointed out by SC above, there has been a broad based and very strong rise in employment and with an unemployment rate now at 6.2% Ireland is approaching full employment (Finance have it at 5.5%). This will inevitably push rents up ( and house prices) and as Ronan Lyons points out (in his latest Daft.ie report ) the policy response ( to cap rental growth in some areas) is creating an insider-outsider market- those currently renting are protected and therefore less likely to move, so new lets are now rising faster than before.
Deprecation of 0.5% per year is FAR too low an assumption for depreciation. At that rate it would take 139 years for half of the housing stock to depreciate and 277 years to get to 75%.
Are there are any historical example of housing stock depreciating this slowly? No. Something like 1% – 2% is more realistic to take into account a): income effect – as people get richer they prefer better houses; b) geographical intensity of economic activity inevitably shifts over time, and housing generally follows.
Colm, as is so often the case, hits the nail on the head when he asserts that the outcome in terms of unaffordable property prices and rents reflects the revealed preference of politicians. What else should one expect in a majority property-owning democracy? Constantly increasing prices generate constantly increasing economic rents that can be cashed in when the properties are sold. The mainstream political parties (FG, FF, the remaining little rump of Labour and, to some extent, the Greens) and large swathes of the independents know that they would be dead in the water if they were to authorise changes in policy that would significantly increase the supply of housing and thereby reduce the economic rents being accumulated by all property owners.
It’s a very simple calculation. When the number of those who will lose significantly exceeds the number of those who will gain – and particularly when those who will lose are more prone to vote – the economic rents captured by the majority will be protected.
However, the permanent exclusion or the perceived permanent exclusion from the economic rent generating trough of a significant minority of voters can pose a problem for the rent capturers. If the person the excluded view, almost inevitably falsely, as their champion can capture right-wing establishment politicians or they can make common cause with right-wing politicians (e.g. Trump and Brexit, resp.) they can upset the applecart. If their “champion” fails to do so (as Wilders and le Pen failed in the Netherlands and France) they won’t. But they will lose out inevitably in all circumstances as the rent capturers close ranks.
In Ireland there is no real risk that the excluded will pose a political threat to the rent capturers. The Great Redistribution keeps the immobile excluded largely docile while the mobile excluded, as always, vote with their feet.
The recovery was not built on a real export boom and total Information and Communications employment growth was a net 5,000 from 200,000 jobs added in Dec 2012-Dec 2016.
The standalone big employment factories in countrysides or on the edges of towns are becoming rarities in the US, France and Ireland while ICT and international business services cluster in big urban centres.
Much of the published FDI data are incomplete and confusing.
Aidan Regan’s argument here would have more traction if he included the issue of impact of banking jobs moving from London compared with for example addressing the enduring under-performance of the indigenous sector.
The Economist says much of FDI into the UK has no significant economic value.
This is what the head of EY UK & Ireland, a Big 4 firm, said in 2016:
The project count looked good but 60% were in Sales & Marketing and shifting headquarters. The UK government includes estimates of new and “safeguarded” jobs while project values are not disclosed.
Average salaries in ICT firms in Ireland are lower than group firms in the UK as there are more sales/marketing/admin staff with foreign language competence employed in Ireland with the typical techie ratio lower than elsewhere.
https://www.theguardian.com/technology/2016/feb/07/google-ireland-staff-paid-less-than-half-their-london-colleagues
Google said in 2015 that its head count was at 6,000 – this was the first time it made that claim – whereas its number of employees in its accounts was at about 3,000 – the rest are supposed to be contract staff but it’s not clear if the latter are working in Ireland or overseas. In that year Irish inward FDI rocketed to $183bn according to the OECD following restructuring by some FDI firms.
Dan McLaughlin above says the DoF now regards an official unemployment rate of 5.5% as full employment – before the last general election it was at 6% and the rate in Germany in March was 3.9%.
I have been estimating the broad rate for a number of years and on Tuesday I published an estimate of 15% for April, down from a peak of 25% in Jan 2012 when the official Irish rate was at 15.2%.
On Wednesday in its monthly bulletin, the ECB reported on a study that estimated the broad rate in the range 15%-18%, suggesting that Germany is the only zone country with a tight labour market.
http://www.finfacts.ie/Irish_finance_news/articleDetail.php?ECB-says-broad-rate-of-Eurozone-unemployment-in-15—18-range-781
“the revealed preference of politicians”
Landlordism.
I find the idea that some kind of anti-foreigner narrative will emerge, totally ridiculous. Full disclosure, I’m engaged to a lovely Finnish girl. I’m an Irish man. Living in Dublin. Bought last year.
For a number of reasons.
1) Ireland has quit a mobile educated work force. A lot of 20/30 something’s spend time and/or work or have worked abroad. Most have a family or friend that does so. Consequently, most Irish 20/30s see large amounts of educated foreigners working here as a good thing. A right they enjoy(Ed) elsewhere. A Normal thing.
2) Irish people always blame ‘the governemnt’ for everything. There’s an inbuilt assumption in every Irish person that if there’s a problem it’s due to some government incompetence. And if there’s something working it’s by chance or taken as a given.
3) These Europeans are not an isolated group. They’re in relatioships with Irish people. They mix well. Most are educated Europeans with similar cultural backgrounds. So they’re friends/partners/relations etc…
I broadly agree with JTO on this one. The Doom Porn from ‘experts’ during the down turn was absolutely incredible. Now we’re caught flat footed where are the Irish Times articles explaining why their economic Armageddon arguments were total BS? And why aren’t the Irish Times calling them out?
I think we need vacant property tax. We need infrastructure. We need more than Metro North. In fact, current trends would justify making making the green Luas line Metro standard as part of the Metro North project.
AIB shares should be invested in Transport and other infrastructure requirements.
We’ll just have to hope the 10 year bond yield stays around 1% for a couple more decades.
Many thanks for this spirit-lifting contribution. But I fear you and peers do not have the politicial heft to elect public representatives who will take on the huge grey blob of rent-seekers and implement the sensible policies you desire.
(This post was first made early Thursday and appears to have entered Spam Limbo!)
Dan McLaughlin above says the DoF now regards an official unemployment rate of 5.5% as full employment – before the last general election it was at 6% and the rate in Germany in March was 3.9%.
I have been estimating the broad rate for a number of years and on Tuesday I published an estimate of 15% for April, down from a peak of 25% in Jan 2012 when the official Irish rate was at 15.2%.
On Wednesday in its monthly bulletin, the ECB reported on a study that estimated the broad rate in the range 15%-18%, suggesting that Germany is the only zone country with a tight labour market.
http://www.finfacts.ie/Irish_finance_news/articleDetail.php?ECB-says-broad-rate-of-Eurozone-unemployment-in-15—18-range-781
“In France and Italy broader measures of labour market slack have continued
to increase throughout the recovery, while in Spain and in the other euro area economies they have recorded some recent declines, but remain well above pre-crisis estimates,” the ECB bulletin article said.
@Brian Woods
Please be a bit more adventurous, Baldonnel?? There is a great untapped world outside The Pale you know!! 🙂
@Colm McCarthy
I would agree with another poster in that we probably need both, 20/30 storey in the CBD area and houses in the infill and greenfield sites for different markets catered for I would think.
On another note Cork’s rent is skyrocketing as well yet it has the least % of people born outside the county living in the county, interesting fact. Of course it is only a stat and isn’t broken down into city and county, waste of time doing that in Cork anyway when the urban is far bigger than the city boundary.
I wonder what effect the tourism VAT rate has on diverting accommodation from residents to visitors.
As for the influx of new people …. people have been moving around for the past 150,000 years or so …
… and speaking lots of languages ….
Human ancestry correlates with language and reveals that race is not an objective genomic classifier …
… http://www.nature.com/articles/s41598-017-01837-7
all welcome as long as they become more Irish than the Irish themselves …. on this little island ….
Not sure its the revealed preference of politicians. They have none, beyond getting elected. Its the revealed preference of voters.
It’s really hard to grasp the fact that we’ve reached this point of such a shortage after we were told for years that there was a huge glut of houses. I recall reports from around 2011 on the thousands of hotel beds in Dublin that would have to be taken OUT of the market. There appears to be something radically wrong with official forecasting and statistics but nobody has been held to account. Construction costs (labour and materials) never really went down – workers just lost their jobs. The developers were demonised, land has not been zoned and serviced and now finance is scarce. It’s hard not to think that the persistence of the problem is to the benefit of the wealthy, the professional class and general upper middle classes in Ireland who tend to have their wealth bound up in property. But rather than ‘curse the darkness’ I believe that immediate incentives to encourage homeowners to rent out rooms or convert garages or similar to standalone flats should be considered. Or a vacant site tax or a high tax on unoccupied homes. Some dedicated property-lending bank/institution is needed – but obviously not another Anglo-Irish Bank. As posters have often pointed out on this site, with loads of available land, suitable building conditions and low population density we should have some of the cheapest land and houses in Europe.
This is true. But, its not only houses and hotels. A few years agp some economists wanted the new Dublin airport terminal mothballed as they saw so little future demand for it.