Millennial housing crisis engulfs Ireland
Three sets of figures confirm Republic’s fractious relationship with housing
The average price paid for a home in Dublin in the past year was €462,098, according to the Central Statistics Office.
“Housing exclusion” is how it’s referred to in the literature. It’s happening all over the world, young people, young families forced to pay over the odds for basic housing or to move further and further away from their place of work to find decent accommodation.
It runs alongside a collapse in home ownership, a decline in living standards and an accelerated wealth divide. Ireland just happens to have one of the worst examples of it. A cursory glance at Wednesday’s news flow confirms it. First we had figures from property website daft.ie, suggesting average rents here have almost doubled since 2011.
It said the average rent nationally stood at €1,443 in the first quarter and just above €2,000 in Dublin. If you’re abiding by the 30 per cent rule of thumb for rent – which recommends spending no more than about one-third of your income on rent – you need to be earning, as a single person or a couple, about €10,000 a month pretax to rent in the city.
Then came the latest Residential Property Price index, which shows house prices are now growing at a rate 3.7 per cent – the fastest rate of growth recorded in two years. The pandemic has triggered a mini-buying frenzy, which may be related to several factors, including the build-up in savings; the increased incidence of remote working; and the ongoing shortfall in supply, which has been aggravated by the slowdown in construction. The average price paid for a home in Dublin in the past year was €462,098, according to the Central Statistics Office, just over nine times the average full-time salary.
And to cap it off, the Central Bank tells us that the Irish banks now charge the highest mortgage rates of any country in the euro zone.
The regulator’s latest monthly data on interest rates show the average rate applied to new mortgage contracts here is about 2.79 per cent, compared to a euro area average of 1.26 per cent. The differential costs Irish consumers about €80,000 extra on a typical €300,000 mortgage over 30 years.
These indices advance in the face of countless Government measures and pledges to address the problem. Is it any wonder that housing has become the State’s number one challenge?