Brexit could hit house prices in most of Republic but drive up Dublin demand

Expert says south Munster, which export dairy and beef to Britain, could suffer almost as much as the Border region in Brexit

Checking out house prices in Dublin. “In Dublin you could see increased demand because of more people moving in to work”

Checking out house prices in Dublin. “In Dublin you could see increased demand because of more people moving in to work”

 

Brexit could hit house prices in most of the Republic but drive up demand for homes in Dublin, experts warned politicians on Wednesday.

They also predicted that places such as south Munster, which export dairy and beef to Britain, could suffer almost as much as the Border region when the UK departs the EU.

Dr Kieran McQuinn, of the Economic and Social Research Institute (ESRI), told the Oireachtas Budgetary Oversight Committee that Brexit would hit the Republic’s housing market.

The economist suggested that there would be an “adverse impact on the market” in areas outside Dublin whose economies depend on vulnerable activities such as agriculture, food and tourism.

“But in Dublin you could see increased demand because of more people moving in to work,” Dr McQuinn said, responding to questions from Fianna Fáil TD Lisa Chambers.

Dublin is expected to lure businesses seeking alternative European bases to the UK following Brexit.

Dr McQuinn acknowledged that the Border region, lying either side of what will be the UK’s only land frontier with an EU member state, would be worst hit. However, he predicted that other areas of the country faced similar hardship as trade with the UK declined.

The economist noted that ESRI reports have already highlighted that tourism, agriculture and food processing were amongst the industries most vulnerable to Brexit.

“Our analysis suggests that certain parts of south Munster, which are heavily dependent on agriculture, that these are also impacted.”

Difficulties

He added that all parts of the Republic where dairy and beef production account for a large share of farming faced difficulties.

Dr Adele Bergin, ESRI senior research officer, stressed that any benefit from foreign direct investment would not outweigh Brexit’s negative impact on trade.

She told Sinn Féin Deputy Pearse Doherty that research showed that the UK expected to lose about one quarter of foreign direct investment in industries such as technology, pharmaceuticals and banking following Brexit.

Some of these businesses could move to the Republic, which she pointed out was already good at attracting investors from overseas.

According to Dr Bergin, investment would begin flowing “immediately” after a no-deal Brexit, and at the end of any transition period in an agreed exit.

Earlier she told the committee that the latest ESRI research showed that a no-deal Brexit could result in the Republic’s businesses creating 80,000 fewer jobs than if the UK stayed in the EU.

If the UK were to agree a deal, that would still result in the creation of 40,000 fewer new posts.

Dr Bergin pointed out that the Republic’s economy would continue growing despite Brexit, but at a slower rate.

Tariffs

She also noted that the institute has calculated that families could lose between €900 and €1,400 a year in income through such things as higher prices resulting from tariffs on imported food and other products.

Dr Bergin explained that the ESRI’s research covered three basic scenarios: an agreed exit, with a transition period to work out an EU-UK trade deal; an “orderly” no-deal exit, with some interim provisions facilitating trade; and a “disorderly” no-deal exit, with no transitional arrangements.