Getting on the property ladder is something we all consider at some point in our lives. We’ve all pictured our dream house with all the bells and whistles, and yet, for many of us, that’s all it will ever be.
A dream.
Because, unlike previous generations, young people living in Ireland today are being priced out of the property market. House prices have never been higher, rent prices have never been higher, more evictions are happening today than during the famine, and homelessness reaches new all-time highs month on month. But why is this happening?
The Irish Economy
For centuries, Ireland was a nation under the boot of its nasty next-door neighbour, but the last 50 or so years have brought about significant change. Low corporate taxes have attracted large multinationals to the shores of Ireland, leading to periods of extreme prosperity through the 90s and right up until the recession of 2008, with billion-dollar companies like Microsoft, Apple, Google and Pfizer still paying taxes here every year. As of 2023, Ireland is the most expensive country in the European Union, with the cost of living over 40% higher than the EU average. The nation boasts the third-highest GDP per capita in the world and is the second most competitive economy after Denmark. At first glance, that all looks great. Fantastic, actually. However, these inflated numbers don’t paint the full picture of what life is like for the average Joe. When it comes to salary, Ireland doesn’t crack the top 10, and the country is not even in the top 15 globally in household disposable income. The Irish economy has been distorted by tax-driven growth, a phenomenon now famously referred to as Leprechaun Economics.
Keeping that in mind, the state of the Irish housing market isn’t actually all that surprising. The first issue, and perhaps the biggest, is supply. The financial crash of 2008 brought construction to a grinding halt, which, paired with government-imposed restrictions on housing density, has led to severe shortages in recent years (the pandemic didn’t help either). But lack of supply is just one of the problems plaguing the Irish housing market. Another is affordability.
“Back in my day…”
We’ve all heard the story. Uncle Mike bought his first house in the late 80s when he was just 24 years of age. He worked his socks off for a few years after finishing school and put a deposit down on a beautiful three-bed outside of town. Fair play, Mike. Unfortunately, the average house in Ireland now costs over four times what it did back in Mike’s day, and yes, that’s adjusted for inflation. Meanwhile, the average salary hasn’t even doubled. But you don’t even have to go back that far. Here’s a look at Irish residential property prices from the last 10 years.
To put the ridiculousness of the situation into perspective, let’s take the average Joe, a young, single adult on an average Irish salary, down to the bank to enquire about a mortgage:
Joe earns right around the average €45,000 pre-tax. The maximum value house he can take out a mortgage for is 4 times his salary. So €180,000. Compare that against the median house price in Ireland in 2023, which estimates put at between €305,000 and €315,000 at this time. So, out of the limited number of properties available on the market, the average Irish person can’t buy most of them.
So, rent?
daft
/dɑːft/
adjective
1. silly; foolish.
The prospect of buying a house on his own is bleak, to say the least. But if the average Joe can’t buy, at least he can pay off someone else’s mortgage for the rest of his life!
It is a fact that in this country, mortgage repayments are far cheaper than rent, and the gap is widening. In every part of Ireland outside of two affluent Dublin areas, rent on a three-bedroom house is considerably more expensive than mortgage repayments. An 85% increase in rent prices in the last 12 years has made renting a luxury for a lot of young people. Yet, despite the exorbitant prices, sites like Daft see daily listings garner hundreds of views within a couple of minutes, while Facebook groups are bombarded with messages every day from desperate students and working professionals with no place to live.
Just take a look at this queue for a viewing in Dublin last year. The apartment was listed for 1,850/month, with no photos of the actual property attached, and still, more than 100 people queued up for hours in hopes of securing the tenancy.
Buying is nearly impossible. Renting will financially cripple you, if you can even find somewhere. Is it any wonder then that homelessness in Ireland is at an all-time high? While most European countries protect tenants from no-fault evictions, here landlords can hand you your walking papers for pretty much any reason they see fit.
The Eviction Ban
Ah yes. The eviction ban. Unless you were living under a rock for the last year (€700/month + bills), you were witness to the public debate surrounding this topic. Still today, the effectiveness of such legislation is a point of contention in the national conversation, but in the case of the most recent ban, it hasn’t done much to help things. The ban was in place for five months, before being lifted in March 2023. And then what happened? 5,700 termination notices in the following 3 months. By June, homelessness reached an all-time high.
And frankly, it’s not the everyday small landlords we should be blaming here (though some definitely warrant that reaction), but the continued incompetence of the Irish government in providing social and affordable housing. For the past three years, they have failed to meet their housing targets, and things don’t appear to be improving.
Time to leave?
While obviously not a realistic option for those hurt the most by the housing crisis, for many young people, searching for greener pastures is an attractive choice. And sure enough, emigration is on the rise. 7 out of 10 young people between the ages of 18 and 24 are contemplating a move abroad, compared to 5 out of 10 in 2012. Yes, flying the coop is a longstanding Irish tradition, but the sentiment seems to be shifting from an adventurous want to a desperate need.
The government will tell you this trend back to emigration is folly, with the statistics showing a net positive migration in Ireland this year (more in, less out). However, a big reason for this is the influx of asylum seekers driven from places of conflict, and there are actually fewer Irish nationals returning each year. A 44% increase in Irish doctors emigrating to Australia from 2018-2021 is perhaps a better stat to consider, showing that even to those in the best-paying careers, Ireland is losing its pull.
The bottom line is that Ireland is no longer an attractive place to live for young adults. Insane price increases have caused young people to give up on their ambitions of one-day owning property here and laying down roots. In 2004, over 60% of 25-34 year olds were homeowners. By 2019, that number was 27%, and is sure to continue plummeting. This crisis is a complete, systematic failure of the Irish government that will drive young people out of what is, all problems aside, a great place to grow up.
Anyways, if anyone has a room going, message me A.S.A.P.