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Ireland is bogged down in a generation war between the young and the old on housing

David McWilliams: Irish land is way overpriced. It’s a scam foisted on the people by those who own land and their supporters

In the first years of the American republic after the revolution, newly liberated Americans lived in fear that the British would re-invade to seize back the colonies. The fledgling country was politically fragile. As soon as the revolution was won, the various factions within the patriot leadership began to emerge. Infighting was rife between federalists who wanted a stronger central government and republicans who wanted the individual states to have more power.

The United States was also experiencing hyperinflation. As its currency, the continental, became worthless, hyperinflation raged as internally states defaulted on their debts and externally few financiers would contemplate lending to the federal government. It was critical that the Americans projected strength from somewhere.

And just when things could get no worse for the patriots, in 1790 the very first census of the new American Republic indicated that there were only 3.9 million citizens in the new country. This figure fell short of the estimate that George Washington expected. He instructed Thomas Jefferson to recheck it. When Jefferson’s work produced an estimate above 4 million, Washington seized on that figure. And thus the US census was manipulated in order that the new country, would appear stronger.

To put that American figure in context, Ireland in 1790 also had a population of 4 million. Today there are more than 330 million Americans, compared with 5.1 million people living in this republic, according to the latest census figures. Much is made of the fact that the Irish population has passed 5 million for the first time since the mid-19th century, but when you put it in context the population of this island is still extremely sparse.


Ireland is not full. Relatively speaking, Ireland is empty. In 1840, for example, there were 2.9 million people in the Netherlands. In Ireland at that time there were 8 million. Today there are 17.1 million Dutch people. Had the Irish population expanded at a similar rate to the Dutch there would be 47.1 million people in Ireland today. To those who suggest that we have some sort of limit on population based on the ability of the country to sustain a growing population just think about 47 million!

The Dutch have managed to sustain their population while at the same time tiny Netherlands (much of it below sea level) has managed to be the second biggest exporter of food in the world after the giant America. This truly extraordinary statistic is testament to the fact that, with such a dense population, land cannot be wasted. For the Dutch, land is a precious resource and treated as such.

In Ireland, our attitude to land is cavalier. As a rule of thumb the country with the lowest density per head should have among the lowest land prices and therefore houses prices, land being the base asset. But this is not the case in Ireland. Our underpopulated country has some of the highest house prices in Europe.

This can’t be explained by basic economics. The average cost of a family home in the Netherlands is ¤390,000. In Ireland it is ¤305,000. There are 502 people per square km in the Netherlands. In contrast, there are 72 people per square km in Ireland. Assuming that the cost of building materials and labour is about the same in both countriues, Irish land is way overpriced. It’s a scam foisted on the people by those who own land and their supporters. This heist leads to rents and house prices being higher than they should be, while housing supply is lower than it should be.

Cui bono? Those who own land, who get their income from rents, land hoarding or land speculation, and homeowners who see their wealth increase as they watch television. The banks and financial system, which lend far too much money, far too expensively, to far too many people, also gain. And the State, through various nonsensical taxes such as stamp duty. All this means that more people are funnelled into renting because they are priced out of the market.

The recent census shows that in the past five years the number of rental homes has increased by 7 per cent, with 330,632 homes rented from private landlords. The number of homes rented from a local authority also increased by 7 per cent. There are simply more people here.

Overall, the population has gone up by 8 per cent since 2016, the strongest population increase in the EU. Since 2016 the population of Ireland has increased by 387,274, with 167,487 accounted for by natural increase and the rest, around 220,000, by net migration. The swing to immigration is in contrast to the last two censuses, when the natural increase, meaning existing residents having more babies, was the main driver of population growth. Today it is immigration.

All this is pushing up rents. According to the recent census, average weekly rent to private landlords increased by 37 per cent over the past six years (€272.91), with nearly 110,000 households paying over €300 a week in rent, more than double the amount in 2016. The difference is even more stark when looking at rental accommodation charging more than €400 a week, with nearly four times as many households paying more than this in 2022 than they did in 2016.

In terms of who is paying, it is young taxpayers. The number of retired people increased to nearly 658,000, up by 21 per cent from 2016. There is an EU average of three people working for every retiree across the EU, but the figure for Ireland is about 5:1. These positive demographics should mean that young workers in Ireland carry fewer financial burdens than their EU counterparts, but this demographic windfall is eliminated by rents and house prices which decimate after-tax wages.

Ireland is bogged down in a generation war between the young and the old, and the battleground is land, housing and rents. Is it any surprise that the young intend to vote in large numbers for radical change?

The census numbers give us an indication about just how radical that alternative must be – far more radical than anything George Washington and those American revolutionaries might have entertained.