How Did Ireland's Housing Crisis Get So Bad?

this video was brought to you by nebula when you think about Europe's most expensive cities you probably think London Paris or a Scandinavian City like Oso but the most expensive European city

to live in is by quite some distance actually the Irish capital of Dublin in fact Ireland has been suffering from a severe housing crisis for years now leading to a dramatic rise in both house

prices and rent and over 60% of Irish people today sight housing as a key issue compared to Just Around 10% across the EU as a whole now this might come as a bit of a surprise to the average

viewer given that Ireland's economy has far outpaced others in the EU and in 2023 was the richest country by GDP per capita not only in the EU but in the world but Irish wages haven't grown at

the same rate as its GDP and have actually lagged behind housing costs for years now so in this video we're going to explain why this issue has been decades in the making why it's gotten

worse recently and how it's affecting Irish politics so what actually is the housing crisis well when people talk about Islands housing crisis they could either be

talking about the increase in Irish house prices or the increase in Irish rents when it comes to house prices over the last decade property prices in Ireland have more than doubled

increasing nationally by 127.5 to put this number into perspective we can look at the house price to income ratio this compares the cost of the median home in a certain area with the median income in the that

area generally speaking areas of affordable housing have a ratio around three or under while severely unaffordable is considered to be five or higher in 2013 the index rate for Dublin

was at 3.7 which means the median house was 3.7 times more the average income but this ratio has steadily increased since 2013 and shot up since 2019

reaching nearly six in 2021 and the situation is actually worse outside Dublin nationally the median house in Ireland cost €3 370,000 at the end of

2022 7.7 times the average income of 48,000 now let's look at rent a large proportion of the Irish are reliant on the private rental sector which has also

seen Rising prices in fact from 2010 to 2023 rents increased by 100% the third highest increase recorded anywhere in Europe after Estonia and lbia and far

beyond the EU average of under 25% today the average rent in New tendency stands at nearly €1,500 even though there are laws in place to prevent landlords from Raising rents above a certain threshold

They Don't Really Work and they're not well enforced with reports suggesting that more than a third of landlords actually ignore them now obviously the housing crisis has made life worse for

ordinary Irish people but it's also led to an increase in both poverty and homelessness which has in fact been exasperated by Island's noall eviction policy allowing landlords to evict

tenants without having to give a reason unfortunately things have gotten worse recently for three reasons first stagnant wage growth second institutional investors and third a

chronic lack of social housing let's start with wages whilst rents increased by 100% between 2012 and 2022 wages only increased by 27% now even though

Island's economy is booming wages are stagnating and Island's GDP far surpasses the income of its actual citizens and what this means is that most of the money made in Island isn't being evenly dist distributed among its

own population astonishingly wages are actually lower today than they were in 2009 according to oecd data when we compare it to the EU Ireland's annual

wage growth rate in 2021 to 2022 Falls just below the EU average there are 18 countries ahead this wage stagnation has particularly hit young people and they're earning Less in real terms than

he did in the '90s and early 2000s as a result young people are finding it really hard to move out 2third of Irish people aged 18 to 34 still live with their parents a rate significantly

higher than the European average of 42% the second reason are institutional investors which have become significant players in the Irish property market after the 2008 crisis when property

values dropped These funds began buying up more properties in 2013 the Irish government introduced a tax regime that exempts these funds from corporation tax on rental income encouraging these funds

to further invest in Irish property which puts upward pressure on house prices in 2022 58% of all newly built homes in Greater Dublin were bought or developed by these funds the third

reason for the crisis is a chronic lack of social housing which has historically played a crucial role as a stepping stone onto the housing ladder while Ireland actually has more social housing

than some other European countries it's still not enough and the social housing waiting list has steadily increased for the past two decades from 26,000 in 2002

to over 45,000 today a lot of this has to do with a series of government programs that allow social housing tenants to buy their houses off the state at a discount similar to the UK's

right to buy scheme under Margaret fer by the early 1960s people could get back almost 30% of the cost of a standard Suburban house from the government and in the 1980s the government began to

reduce the number of social housing developments being built today roughly 2third of Ireland social housing has been sold into private ownership the problem was exacerbated by Ireland's

property crash at the peak of the bubble the construction sector accounted for 25% of GDP and 20% of all jobs after the 2008's global financial crash the bubble

burst and the construction industry collapsed and The Limited housing projects that were being built were abandoned successive governments since then have used postc crash austerity to completely abandon social housing

development and the last affordable housing schemes were discontinued in 2011 targets are set every year to build a certain amount of social housing but either these targets are too low or

they don't get met Ireland's wor sitting housing crisis has interacted with Irish politics in two conspicuous ways first it's fued some of the anti-immigrant sentiments we've seen in Ireland recently because many Irish people feel

migrants are putting more pressure on the housing and social housing markets even though the primary cause of the housing crisis is undeniably bad government policies this includes the government's most recent help to buy

scheme which while it might help a handful of people will ultimately just further inflate Irish house prices by putting more money in the market second it's fuel the rise of shen faine whove made housing one of their key issues and

are now pulling well ahead of any other party now for context Shen Fain are an Irish Republican party historically closely associated with the Irish Republican Army however while the party is still in favor of reunification

eventually in the last few years they've shifted their focus to economic and cost of living issues including bringing down housing costs locking Islands pension age at 65 and increasing taxes only on

people earning over €100,000 a year if Shane F do get in they've promised to freeze rents ban no fault evictions make it harder for landlords and institutional investors to buy Irish

property and build more social housing but while these are all Noble aspirations International comparison suggest housing bubbles are more difficult to deflate than governments would like to admit and without a full

on Crash Ireland's housing crisis is unlikely to go away anytime soon you've no doubt been following along with the news from Israel and Gaza but if you want a better understanding to dive deeper into the history of the region

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