I think Galileo researched this 400 years ago ...
it's how pendulums work ....
Is Dublin becoming as unaffordable as San Francisco?
Over the last five to 10 years, Dublin has become the European base for the likes of Google, Facebook, Amazon, Salesforce, LinkedIn, Yahoo! and Microsoft. Its controversial corporation tax of 12.5 per cent, introduced in 2003, has undoubtedly been the major selling point. However, during that period, the cost of living has …
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Wednesday 27th April 2016 09:19 GMT Caff
building costs
A key part of the issue in dublin is the developers claim that they cannot sell affordable housing at a profit. The main costs they point at being government taxes and levies and the cost of land.
The land issue could be handled by opening up cheaper land to commuters through improved public transport. Or increasing the turnover of land through vacant site levies.
Many people also point to offering a temporary VAT increase to "kickstart" development or reduce development levies, though a criticism would be that woudl simply funnel money to the developers and not result in any affordable housing.
Any developer led initiative though would take some time to ramp up. A government led program of soical housing would be much quicker. Though many people would be opposed to this as they have an interested in the currrent housing shortage and its role in driving up property prices. There is also the role of NIMBYISM that causes huge delays in the planning process.
A good site for reading up on these issues is http://www.dublininquirer.com/2016/03/23/in-dublins-housing-crisis-bureaucracy/
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Wednesday 27th April 2016 11:33 GMT Kristian Walsh
Re: don't forget the bubble in Cork
Cork's rental increases are very little to do with Apple. Most of Apple's "new" staff are on low wage selling and customer support call-centre jobs, plus junior clerical/accounting positions, and almost none get stock options. Everyone else has been there a long time, and isn't in the market for accommodation. Certainly, those new jobs did increase demand for housing, but they didn't raise the availability of money to pay for it: it has become harder to get an apartment, but rents have not shot up. (Also, Apple's location on the very periphery of Cork city makes it possible to live in one of the city's northern or western satellite towns and commute in)
In any case, you're assuming that Apple is the only major employer in this city, which is completely off the mark. The medical and pharmaceutical companies that account for most of Cork's FDI employ more people, and pay them better wages, than Apple does - as such, their hiring activities have a far more significant impact to the local economy.
On Dublin, the mention of Google, Facebook and company is a bit of a red herring (and Microsoft doubly so, as they've had a major presence in Dublin for over 30 years with no recent mad-dash to hire people). What I think is really fuelling the rush is the second-tier of tech startup companies, who can't match the prestige of working with a name-brand, so offer higher salaries instead.
These guys are using their VC's money to out-bid each other for limited developer talent. Those workers need housing, but the difference from Cork or other cities is that in this case, they've got money to overpay for that accommodation and drive out lower-waged residents. In this, the analogy to San Francisco does hold.
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Wednesday 27th April 2016 09:43 GMT James 51
I spent a year in Dublin working for Lotus and IBM (I was young and I needed the money) around 2000/1. Housing was particularly expensive then too. I know that some students working for Intel were getting less than six thousand punts a year (about £4,500) which was less than the rent for a house. It took eight students from the same university living together in very cramped housing to be able to afford to live there. So this isn't a new problem, just the latest manifestation of it.
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Wednesday 27th April 2016 09:49 GMT Alan Bourke
The corporate tax rate is part of it for sure ...
... however to cite it as the only reason is just incorrect - many of these companies are just as interested in the fact that Ireland is the only English-speaking country in the Euro currency area. And in the event of Brexit, it'll be the only English-speaking country in the EU.
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Wednesday 27th April 2016 14:25 GMT Slx
Re: Erm, isn't there a housing glut in Ireland?
The 'celtic tiger bubble' housing glut was inappropriate development in rural areas mostly.
It would be a bit like saying that the London housing bubble would be solved by a glut of housing estates built for non-existent people in Cumbria and Norfolk.
There was an insane notion amongst the banks that you could build housing developments in what were quite remote rural areas and that somehow these would be populated under the "if you build it they will come" system. Most of them were built as a purely speculative tool with a notion that they could be sold on and in a period of absolute hype.
Quite a lot of Irish (and major British) banks all jumped on the bandwagon and burnt through massive amounts of money.
The issue was that when the banks discovered their mistakes and the credit crunch happened, all development stopped, even sensible development. Ireland went from building 100,000 houses a year to about 20. The result of that was you'd a massive demand put on the rental sector which (like England) tends to be quite small as most people prefer to buy.
The economy didn't collapse. It most certainly was not similar to Greece or Spain. It probably has more in common with the US housing bubble and credit crunch and the Icelandic bank madness than anything else.
There was quite a strong underlying demand and once you striped away the excesses of the speculative bubble, there was a strong core economy buried in there i.e. the original Celtic Tiger.
Normal levels of development of property still haven't really quite returned to Dublin and the other cities. It's starting to ramp up again, but cautiously. The demand is massively outstripping supply and there's a full blown housing crisis now in Dublin as a result.
Basically, banks are like bipolar gamblers. They went absolutely manic on lashing money on investments that made no sense then flipped to the other extreme and wouldn't lend anything to anyone, even sensible and profitable developments were getting refused until quite recently.
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Wednesday 27th April 2016 10:12 GMT Mage
Dublin getting unaffordable?
No, it's been that way for 10 years.
Ghost estates were built where no-one wanted to live. There is MASSIVE shortage of council / social housing because like UK they started selling it off and building no replacements.
The new apartments are poor and needed for the Polish that came to Ireland to build the new apartments.
There has never been a glut of housing in Ireland. It's plagued by linear development in rural areas and lack of any coherent planning. Developers (speculators), not people, councils (bribed) or government decided where to build. They only wanted cheap land.
Cheap loans, loans based on two incomes, inflated earning reports, 90 to 100% mortgages, Buy to Let, first time buyer exemptions all drive up prices. The only way to substantially boost housing is for government to build the social housing, ban buy to let by inept middle class speculators that are not real landlords. Block vulture fund speculation. Force use of derelict houses or land, no eviction of people from re-processed property unless it's bought by an individual as main residence. Massive tax on "holiday homes" which cause rural housing shortages.
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Wednesday 27th April 2016 11:40 GMT T_o_u_f_ma_n
Re: Dublin getting unaffordable?
Developers are able to bypass mandatory quotas for affordable housing by paying upfront fees to the councils. It is in the interest of the councils to keep prices high so that the locations remain attractive to the wealthier parts of the population and so that amounts of property taxes collected (one of their income source) stay high too.
The massive amount of fire sales which happened between 2009 and 2014 through NAMA were to financial conglomerates which were all too happy to purchase cheap estates in cash at the time when banks would not lend to individuals and families. Now these flats and houses are rented at high yields, pushing prices upwards due to the lack of affordable options.
Added to that the absolute failure of successive governments to plan and build a decent public transport infrastructure covering the whole city (as opposed to a single north south stretch and the city center only) and you have a capital where prices are artificially high and with very poor value for money. It's like 2005 all over again.
Fine Gael and Labour had a shot at fixing the mess after the crash and they absolutely dropped the ball when it comes to housing.
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Wednesday 27th April 2016 13:46 GMT Anonymous Coward
Re: Dublin getting unaffordable?
"so that amounts of property taxes collected .... stay high too."
Dead on! Inefficient central & local government has had the begging hand-out for eons. Now they're addicts and can't rehab themselves off this 'tax-charity'.
"Now these flats and houses are rented at high yields, pushing prices upwards"
Dead on again... What a world....
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Friday 29th April 2016 13:24 GMT TheDillinquent
Cheap loans, loans based on two incomes, inflated earning reports, 90 to 100% mortgages...
>>>Cheap loans, loans based on two incomes, inflated earning reports, 90 to 100% mortgages, Buy to Let, first time buyer exemptions all drive up prices. The only way to substantially boost housing is for government to build the social housing, ban buy to let by inept middle class speculators that are not real landlords. Block vulture fund speculation. Force use of derelict houses or land, no eviction of people from re-processed property unless it's bought by an individual as main residence. Massive tax on "holiday homes" which cause rural housing shortages.<<<
In other words, the same things that have made housing unaffordable in SE England.
We also have rich corrupt foreigners laundering their dirty money through our housing market pushing up prices.
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Wednesday 27th April 2016 10:20 GMT Gordon 10
So what's new?
Dublin has had mad rents for the biggest part of 2 decades now, tech only being part of the problem. Especially as the major companies are reasonably spread out the Dublin outskirts. Even Yahoo and Goolge are alsmost as far East as you can get without building a skyscraper on Howth or falling into Dublin Bay.
It's problem has never been housing stock per se but piss poor transit links,
It's got some of the worse roads of any capital city, without compensating other transport to ease the burden. It's 2016 and only now is the Luas being linked. Look at the wiki link for all the other missed opportunities.
https://en.m.wikipedia.org/wiki/Luas#Proposed_planned_future_extensions
And let's not mention the port tunnel fiasco. Or Taxi drivers worse than the ones in Paris.
Btw have those slapdash estates they threw up north and west of Swords fallen down yet? They were falling apart after 3 year when I last saw them.
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Wednesday 27th April 2016 10:35 GMT Paul Smith
Unlike San Francisco, Dublin has the capacity for further expansion
Capacity for expansion? Really? You obviously don't know Dublin very well.
Let me remind you; Airport to the north, mountains to the south and sea to the east. The expansion to the west was supposed to have been 'planned' in five fingers separated by green spaces, you could argue that one survives. One of the five (Tallaght) has a rapid transit route into the city (~35mins). The second and third largest conurbations in Ireland are suburbs of Dublin, one of them has a hospital, the other doesn't.
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Wednesday 27th April 2016 14:28 GMT Slx
Re: Unlike San Francisco, Dublin has the capacity for further expansion
Of course there's room for expansion.
The density of housing in Dublin is way way too low. There's absolutely no high quality high rise at all and it's all little rows of boring suburban housing (much like the UK too).
Dublin needs to bring in serious investors with cash - pension funds etc to develop serious housing and go up a lot higher in the docklands and parts of the central area that aren't of any architectural significance.
I find all this talk about protection of Dublin's Skyline crazy.
What Skyline?!?! It doesn't have one.
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Wednesday 27th April 2016 10:49 GMT DrXym
Housing shortage
The price of rent has gone up because not enough houses were built. It'll swing the other way in time. Prices are certainly nowhere close to what a place in SF would cost. Not by a long shot.
Anyway, there are other places in Ireland where businesses should locate. The likes of Galway, Cork & Limerick all host a lot of tech firms and aren't suffering anywhere like the same kind of rent hikes as Dublin.
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Wednesday 27th April 2016 13:33 GMT Berny Stapleton
Re: Housing shortage
Without a local airport to get the staff around, ain't going to happen.... Galway airport is closed, Cork airport does European destinations somewhat, but you not only can't get everywhere, flights are infrequent, at least with Limerick, you can fly from Shannon to the US, but again, frequency is an issue.
There's recruitment issues, Dublin can't get enough skilled people, let alone if someone started up in the smaller cities, the ability to entice people there would be lower.
I'm not saying it's not possible, but Dublin already has it's own issues because Ireland is a small country, those problems would be exacerbated by being outside the capital city.
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Wednesday 27th April 2016 14:35 GMT Slx
Re: Housing shortage
Cork links to all the major London airports (Heathrow, Gatwick, Stansted and City) - All multiple times per day. It has a pretty hefty schedule to LHR and Stansted in particular.
Also to Paris CDG, Amsterdam Schiphol and several other big hubs are connected and it has a lot of smaller UK airports and a fairly broad range of connections to other European destinations, given that it's a city of about 300,000 max it's pretty decent connectivity.
You can also be at Cork airport from the city centre in about 15 minutes, which is a hell of a lot better than most cities.
It's actually very easy to get to and most people flying in/out on business from the states will tend to approach it via LHR or sometimes CDG or AMS.
Direct transatlantic flights are fairly meaningless if you just want to get somewhere relatively flexibly.
The choice of destinations out of Shannon is actually very limited and those TA flights tend to suit non-business travellers much more - i.e. focus on economy class, hard discounting etc and not flexibility.
Overall, I think Cork's pretty well connected - you've also got stuff like tier 1 transatlantic fibre connectivity with the lowest ping times in Europe.
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Wednesday 27th April 2016 17:51 GMT Berny Stapleton
Re: Housing shortage
"Could the housing shortage have anything to do with that?"
IMHO, no. As much as I hate to make this comment, it's simply because of it's size and Dublin is a small city by comparison. A lot of people will move to London, but you can't get them to move to Dublin. I really wish there was a better answer than that, but the size of the workforce in London is hard to ignore, changing jobs is easier and there is generally more going on in London. Socially, someone who is likely to move, probably knows at least one person in London where, they wouldn't know anyone in Dublin, again size...
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Wednesday 27th April 2016 11:36 GMT Anonymous Coward
Ireland always screws the little guy...
Whether you're the little renter, the first-time buyer or the little landlord.... Politicians in the Dail just don't see you.... They're like US politician wannabees (very comfortably well-off)... How many of them ever have to go home-hunting to rent? Ireland is a country of cute-whores. The politicians look after the big-boys and insiders and screw over the little-renters and little-landlords.
The article didn't mention that many landlords have actually left the market in recent years despite lucrative rents. There are many articles about why, so I won't repeat here. But I'd like to add a view. Building places takes time. But the government could help right now by boosting the rental market. How? Bring little-landlords back in....
1. Open up the terms of rent-a-room to include homes that are not PPR.
2. Open up rent-a-room to include homes where the owner is non-resident..
3. Suspend red-tape like PTRB registration and fees for 2 years.
4. Put a stay on Revenue taxes / filing (incentivize mortgage-free landlords).
5. Halt Council inspections / fines for banal nanny-state non-conformance...
6. Suspend red-tape like burdening owners who want their property back to sell...
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Wednesday 27th April 2016 11:36 GMT Bitsmith
Ultimately the cause of sky high rents is policy, not the tech companies.
There's plenty of vacant property in Dublin that cannot be let out. Yes, some of it shouldn't be because it fails to meet fire regulations, much like the infamous Priory Hall development, but there's plenty more which is vacant because of recent regulations on minimum space, room sizes and so on. Lots of flats above shops lying empty as a result. Add to that the truly archaic transport infrastructure making commuting times ridiculous and the result is a rent bubble of unprecedented proportions.
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Wednesday 27th April 2016 11:55 GMT Joe Harrison
Let's blame the Italian bloke
The head of the European Central Bank is Mario Draghi. Although not for long if he continues to infuriate the increasingly cross and increasingly getting-voted-out-because-of-him German senior politicians.
"Mario's Bazooka" was supposed to fix all the problems of the Eurozone (apart maybe from Greece) but although he's been firing it for the last five years until its barrel is white hot the Euro economy is still looking sick. Quantitative easing and Mario's decision to keep interest rates at a bonkers zero percent (ZIRP) means the money supply has never been looser consequently people with unlimited access to almost-free mortgages have bid up housing to ridiculous price levels.
Oh and Mario's Canadian mate Mark Carney (Guvnor of the Bank of England) is doing exactly the same to us in the UK.
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Wednesday 27th April 2016 13:46 GMT Anonymous Coward
It's not that bad.....
I live and work in Dublin and have done for the past couple of years.
You can still buy near city centre on the south side for about €150,000, might need a few extra €€€ to bring it up to spec, but rents are crazy, mine went up 9% this year, for a place with no heating and no double glazing.
But you can also pay silly money, €300,000 for a coffee kiosk about 20ft square anyone? Or what about an old embassy for €80,000,000 or a hospital for €18,000,000.
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Wednesday 27th April 2016 17:00 GMT Anonymous Coward
Dublin planning & the restriction on building upwards...
There are pockets in Dublin with skyscraper like towers. So clearly sometimes building upwards is ok. So what's that all about? Corruption?... Oversight? The point being, that lots of other cities allow for vertical building and it helps keep the overall cost down.... For example: Chicago...
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Wednesday 27th April 2016 19:20 GMT mpreda
Is Dublin becoming as unaffordable as San Francisco?
I moved from Vancouver, Canada to Dublin last year because i felt that i was being priced out of the city by its high rent prices and non existent tech sector.
Stayed there for 3.5 months and realized the situation was far worse in Dublin, at least in Vancouver, for the right amount you can find a place and transit is far superior. I've also learned that aside from car payments and insurance (which by the way it's way higher), over there, you have to pay an annual road tax and you have to go for an annual inspection for your car.
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Wednesday 27th April 2016 23:11 GMT Anonymous Coward
Rip-off Republic ... (Killing the 'America-Dream' Irish style)
1. Transport system? If you're on the Dart / Luas lines which needless to say will cost you your right kidney, then things are grand (assuming its running). But overall the transport-system is actually the bus network, which is more than depressing! Special interests & union deals have prevented 3rd party players from coming into the market. But no matter where your politics lie, the system is now firmly in a choke-hold! Chicago is like Dublin, horribly indebted with pension or other promises, but it still works better as a city, because building upwards is an important aspect that helps keeps prices down!
2. Its very easy to find yourself owning a car that really owns you. I used to have a 17-year old sports car that had a market value of less than 2 grand. But it was costing me over 2000 just to road tax it, and often a thousand to insure. Then there's the insurance levies, fuel surcharges and fat general maintenance costs! Everything like that in Ireland is savagely expensive! So now I use a bicycle! But Its dangerous as cycle paths begin and end suddenly like flaky relationships, and truck & van drivers think its a game of GTA!
3. Even just eating out is an exercise in getting a root canal... Other countries seem to be able to get by offering quality food and drink without extracting a mortgage from you... But not Ireland... What's going on? Tax charity! The government constantly has its hand out. Then they go and blow the money faster than Zuma! Eddie Hobbs once tried to call-out the government on this. I met him once in a pub in Cork. Depressingly he said that government sources had shut down his reporting (RTE is state owned)...
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Friday 29th April 2016 08:27 GMT multikev
Real sources say the opposite, Dublin is cheaper than 10 years ago
Striking headline - but real sources show that, while yes, Dublin is expensive, house prices are lower than 10 years ago and cost of living is lower than 10 years ago.
http://www.rte.ie/news/2016/0427/784646-cso-ireland-progress/
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Friday 29th April 2016 15:47 GMT Anonymous Coward
Re: Real sources say the opposite, Dublin is cheaper than 10 years ago
Horseshit! These aren't independent numbers, just look at the source! You're better off looking at private-sector cost-of-living reports that get compiled for companies / corporations / (Expat services), because they're more accurate and useful... Reports that compare worker / family quality of life in the top 100 cities etc...
For starters wages have stagnated, being capped or outright gutted compared to the Celtic Tiger of 10 years ago. Second, there are far more needle taxes now taking a cut at every corner. Ireland has always worked this way. The biggest charity is Government!
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Biting the hand that feeds IT
