A new report released by credit analysts from Moody’s states that Dublin house prices have grown approximately nine times the rate that employees’ wages have grown in the last six years. This is adding to the housing market difficulties causing many native Dubliners to either move or live on the streets. Many factors can be credited to the rising house prices including; the rise of multinational cooperation’s settling in Dublin coupled with the rapidly growing population. The Moody’s report concluded that Dublin’s population has grown by 21% since 2000 which, makes it the fasted growing city of all European capitals.
It ultimately comes down to the shortages of properties available in Dublin that are driving up the demand for housing, while the supplies stay consistent. Moody’s Investor service released a ranking for the European cities that its inhabitants can least afford to buy a home. Dublin was among the group of cities distinguished for being a hard and expensive city to find housing among many European countries. Additionally, the price to pay ratio for Dublin that determines how much money on average someone earns compared to the average price people pay for housing is comparable to Berlin and Frankfurt. Irish cities are also more expensive according to this ratio than Lisbon, Rome, Madrid, and Milan.
Government intervention is going to be necessary to help drive down prices. Taking a laissez faire approach in this situation could be effective, but history has said otherwise. One determinant that will help drive wages up is demand for workers in many industries in Ireland. Due to strong demand for workers, companies will increase wages to try and entice people who are not currently looking for work to decide that they should now.
Dublin’s current average property price is €336,000 Euros. Many banks will lend up to 80% of the purchase price of a house, which for many citizens is not nearly enough to be able to afford a suitable property. Moody’s predicted that it would take an average person wanting to buy a home in Dublin 14.3 years to own the entire property. That statistic causes many challenges for first time home owners or young families that do not have large savings accounts and will be saving small amounts of money annually.