Why can't we find the cheapest place to live in Ireland?

 

Moving from urban to rural should bring down the cost of living, right? With so little data available, it’s hard to say, writes PATRICK FREYNE

THERE’S WAS A comforting myth doing the rounds in the days of the Celtic Tiger that the idyllic exit-strategy for burnt-out tiger-cubs was a move to the country where things were cheaper.

This was partially-fuelled by the way soaring property prices had skewed the cost of living in urban centres, but it was also perpetuated by regular bursts of Central Statistics Office (CSO) data that unfavourably compared the price of grocery shopping in Dublin with prices in a sweeping area known as “outside Dublin”.

Where you live clearly matters when it comes to lifestyle costs, but ascertaining differences from region to region is difficult.

Shane Diffily, who along with his brother Ronan, owns the area-grading website likeplace.ie, says “one of the most common search-engine search terms that bring people to our site is a combination of a place name and the words ‘cost of living’.”

People are, he says, interested in the cost-of-living ramifications of where they live.

Although they haven’t collated enough data to ascertain real cost-of-living differences as yet, he does point out comments they’ve received on likeplace.ie. They range from a contributor called Collie in Loughrea who says: “I’ve just moved from Dublin. Cost of rent is half and the house is lovely. Going out is cheaper,” to “B” in Kilkenny who observes: “Moved here from Dublin. Nothing to do here at all. No services. Everything is closed by 6pm! And everything – shopping, going out, restaurants – is so much more expensive here.”

These are, of course, subjective assessments but the actual data on cost-of-living differences nationwide is sketchy.

The biggest factor is housing costs. A household’s rent or mortgage makes up the lion’s share of monthly spend. Some areas are cheaper than others in this regard.

The cheapest according to Ronan Lyons, economist with property website Daft.ie, are Longford, Leitrim, Cavan and Donegal. “They would be the cheapest counties in which to buy, but also to rent,” he says.

On the other hand, the relative price between Dublin and everywhere else is also changing.

“One interesting trend that’s emerged since the start of falling house prices and rents is that Dublin prices have come back into line with the rest of the country,” says Lyons. “If you look at the fall in asking prices from the peak, Dublin has fallen between 45-50 per cent. In the rest of the country, there is really only a fall of about 40 per cent. So from that point of view the gap between Dublin and elsewhere has shrunk a little bit.”

He says that it’s the same with rents, though the percentages are smaller. “In Dublin, rents are down about 30 per cent from where they were in early 2008 and elsewhere they’re down 20 per cent or 25 per cent.”

As to why this is the case, Lyons suggests that it could be that Dublin is making the adjustments more quickly and is getting back on its feet faster, “but right now, from a property standpoint, Dublin isn’t as expensive relative to the rest of the country as it used to be.”

Indeed, the relative expense of housing in Dublin meant that, particularly during boom times, there was a certain amount of economic migration within Ireland. But Lyons stresses that it wasn’t because people were attracted to the lower living costs outside of Dublin, it was because they were actively repelled by the high ones within.

“But there’s very poor information generally on migration around Ireland,” says Lyons. “That said, anecdotally you’d hear of people moving to places like Westmeath because it was cheaper. But I think in those cases, it’s more that they were being forced out of Dublin rather than being drawn to Westmeath.”

Beyond housing, there is also data suggesting that other things are more expensive in the capital.

The CSO assessed average prices of 79 items in Dublin and outside Dublin, and discovered that average prices were higher in Dublin for 51 items and lower for 27. Differences included a gent’s wash, cut and blow dry, which was 47.7 per cent more expensive in Dublin and pasteurised full-fat milk which was 4.6 per cent cheaper in the capital.

In general prices were higher for 64.6 per cent of items in Dublin.

On the other hand, a study conducted by the Vincentian Partnership found that rural living in Ireland was more costly than people imagine.

Despite discovering lower prices in certain essentials, including childcare and health costs, its study discovered that on average households in rural Ireland require between €69.91 and €108.61 a week more than their urban counterparts for what the study calls an “essential minimum standard of living”.

“It’s mainly down to transport and food costs,” says Grainne Weld, project officer with the Vincentian Partnership.

“Transport is a significant expense in rural areas and because people don’t have easy access to large multiples, food can actually end up being significantly more expensive. Even where people do have relatively easy access to large multiples we’ve found they do a proportion of their shopping locally and that drives up costs.”

This contrasts with what we know about earnings in rural areas.

Peter Cosgrove, director with CPL, a recruitment company, notes that in general, employers pay a 12 per cent premium to those living in Dublin. This is typically built on what he says is a “general sense of what the cost of living is like” rather than hard data.

“Someone might come up from Cork and notice that a cup of coffee costs €2.50 rather than €1.80 and feel that they need to be compensated for that,” he says. “Some companies, of course, would be very specific in their assessments. Some of the accountancy firms have their own surveys based around property values and the like, but with other companies it’s just built on a general sense that things are cheaper.”

The main reason wages are lower in rural areas seems to have less to do with the cost of living and more to do with supply and demand.

“There is a premium paid in Dublin,” says Cosgrove. “This is also because there’s more competition for the best people than in Cork, Galway or Limerick. In general, if someone leaves Dublin to go to Galway they’re kind of doing it to achieve a work-life balance or because it’s a lifestyle choice. And if someone is going more rural again, they must know that the employer has a better hand when it comes to negotiating pay. They might be the only potential employer for that person.”

Taken altogether, it’s hard to get a handle on all of this.

Clearly the different sets of data are not comparing the same things. The CSO takes an average of prices nationwide and compares them with prices in Dublin. For its study, the Vincentian Partnership spoke to residents of small rural enclaves and measured these findings against data from urban centres.

Then there are extraneous factors such as the access to cheaper shopping in the North for those along the Border. This however is difficult to measure because cross-Border shopping waxes and wanes with the exchange rate.

The Vincentian Partnership are continuing to look into the issue of the cost of rural living. The CSO discontinued their Dublin/Outside Dublin report in 2009. “It wasn’t telling them very much,” according to one of the researchers.

Maybe ultimately, the information will become clearer thanks to the work of independent web-entrepreneurs like Shane Diffily.

“We’re constantly gathering ratings and data,” he says. “We’re hoping to slowly gather information on every major residential area in Ireland so that we can get a better insight into Ireland overall and it will give people the competence to make an informed decision about where to live. An element of that will be cost of living.” But he admits that they have a way to go.

“It would be great if eventually people could say: ‘I’m interested in moving to this small town in Munster – what is the cost of living like?’ and get a straightish answer.”