Soaring Cost of Living in Ireland

For a lot of people living in Ireland, considering the cost of living never really crosses their mind. They pay rent, buy groceries and live their lives. The price of all of it is just that, the price. For others who haven’t grown up here or have traveled outside the country, the everyday price of living is more prevalent. Compared to most European countries, and many countries around the world, Ireland is a very expensive place to live.

The European Union (EU) has a lot of cheap places to live nevertheless, such as Bulgaria and Poland. In order to find out how cheap or expensive, we look at the Cost of Living Index. Based off of Prague, which is the central reference city, we can statistically see just how expensive certain countries are to live in. Both Bulgaria and Poland received scores hovering around 80. This means its 20% less expensive to live in those two countries than the average in the EU. Ireland and specifically Dublin received a score of 202! This translates to a cost of living 102% …

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Second Quarter Predictions

With the Ireland housing crisis still well underway, there are little signs of recovery for a long while, making the current state of the housing market to become the new normal.

The Irish population has begun to accept what it is and proceeding with their life as with an “oh well” attitude. The new normal is here and taking over the Irish community.

With signs of the housing prices to possibly be slowing on their steep upward journey, consumers may begin to come back into the housing market as more active buyers than the market has seen in recent trends.

The second quarter of 2018 brought on some surprising numbers as the overall rates were finally evaluated and ready for assessment.

House prices rose nationally by 2.7pc with an average house price of 254,000 euro, or, 5.6 pc higher than the previous year.

These prices and statistics representing the nation as a whole. However, Dublin alone typically has a large impact on these reports.

In just Dublin, prices rose 1.8pc from March to June….an insignificant rise in just a four-month …

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What the Numbers Mean for those Looking to Buy

Ireland as a whole is eagerly waiting for each month to come, and new statistics to be published. Statistics in regards to the housing market and what can be expected by the next months’ forecasts.

It is with eager thoughts that positive reports mean future gains and future gains mean economic development and of course, citizens of Ireland to get into their homes.

A country with many living in a distressed state as they give up their dreams of home ownership or settle for someplace they simply don’t want, these reports sit a little heavy.

With every new reported couple/persons in the home buyer cluster there comes a story as to why they aren’t following their initial plans.

Maybe they can’t afford their dream home, the supply of homes isn’t available in their price range, or they gave up after years of looking to move into a one bedroom apartment, costing the same amount as a small home. The overlapping theme, unfulfilled.

Most individuals are hoping for the stats to tell them that the country is …

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Judging from cost of living pressures on living wages is wrong

Ibec has claimed that the living wage is not an accurate way to assess cost of living pressure and is a structurally wrong concept to begin with.

The living wage puts a lot of pressure onto the business. Whether the business’s are able to pay is not accounted for in the living wage. This was following the Living Wage technical group, who sets the living wage figure, increased it by 20 cents to €11.70 in Ireland for 2017.

The reason for the increase? It was accounting for the current housing shortage and the increased rent levels.

This is different than the minimum wage set at €9.25 and set by Government’s low pay commission.

The living wage was created in 2014 updated every July. It is ideally the set average wage for full-time employees to cover the minimum cost of living.

It is set by the Living Wage technical group. They consist of researchers and academics and directed by Vincentian Partnership for Social Justice.

It is priced by many factors which include: health insurance cost, food cost, Universal Social Charge weekly …

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Housing Prices push up living wage

The Living Wage Technical Group, an organization that annually calculates the wage required to support an acceptable standard of living in Ireland, recently published it’s 2017 report, listing the living wage as €11.70 an hour. This new rate is €0.20 higher than the previous rate and €2.45 higher than the actual minimum wage in Ireland.

 

The Living Wage Group defines the living wage as a rate that “provides employees with sufficient income to achieve an agreed acceptable minimum standard of living”. It is calculated to account for the price of various necessities such as clothing, food, housing, healthcare, and education. Out of these factors, many experts have attributed rising housing prices as the main reasons behind the need for higher wages.

 

In its 2017 report, the Living Wage Group supported this reasoning and published that “the current housing crisis, and associated increases in rent levels, has been the main driver of the increased wage rate”. The average house price in Ireland has risen 11.2% over the past year, with areas such as Dublin seeing even greater increases in …

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House prices are increasing now up to €1,000 a week, up from previous report

MyHome.ie just released a report than claims house prices are increasing more than the Daft.ie report. MyHome.ie report doubles Daft.ie’s findings, a rival website.

A greater focus on property prices in Dublin may be the reason for the vast difference in price increase especially because Dublin average monthly increase is more than €5,000.

The report also indicates the possible increase of prices are due to the Help-to-Buy scheme being reviewed for termination. Fear from first-time buyers are rushing them to buy houses before the cancellation of the scheme.

The Help-to-Buy scheme can provide tax rebates up to €20,000. The property prices nationally were up 8.9 year-on-year.

Conall MacCoille, author of report, said the huge inflation of house prices can be from job growth, high competition among homebuyers, and rising income. This as well as the Help-to-Buy scheme contributed to a rapid increase of house prices.

An increase of first-time buyer lending and relaxing of the mortgage lending regulations is also a factor.

MacCoille is predicting a rush of mortgage lending in 2017 if the Help-to-Buy scheme is phased out and the …

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House prices to increase for up to 10 years

The Daft.ie report stated that the first six months of 2017 in Ireland the house prices has risen more than all of last year. They will continue to rise for the next five to ten years unless signification measures are taken.

The house prices are moving up 12 percent higher than a year ago with an average of €2,000 a month. This leaves Dublin on the forefront of the housing increase.

Housing prices increasing means more people wanting to sell their home with more than 6,000 homes listed for May. That has been the highest total since middle of 2008. However, this increase of property for sale is not even close to meeting the demand of the market.

With the government reviewing the Help-to-Buy scheme, fear comes as this may lead to another surge of people wanting to buy.

A Daft.ie economist Ronan Lyons warns the rates in Dublin are going to increase faster than any other part of Ireland. He said this was because, “we’ve regulated ourselves out of the volume of homes that are needed”.

The possible cause …

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A conversation with Kevin O’Rourke

Trinity Economist Kevin O’Rourke received a lot of attention recently which centred around a paper he wrote with Agustin Benetrix and Barry Eichengreen that featured on VOX.

The Sunday Tribune picked up on it with the headline ‘House price fall could be worst in history‘. Fairly powerful statement that! Kevin O’Rourke is a man who I personally have a lot of respect for (an example of his work is in a talk he gave to the CFA last year here) so we were delighted when he kindly took a call today while on a working holiday in France.

My questions are in bold, the main thrust of his answers follow them.

You say a rapid adjustment would be best, what can be done to facilitate that? “You have to start by wondering ‘do we think the Irish adjustment is …

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The US obsession with home ownership

This is an interesting clip from the Cato Institute and it covers the various vectors of the financial crisis. In this video the speaker talks about the ‘7 steps to failure’ – the basis of the talk is well covered ground at this stage but the addition of the Cato presentation is meaningful and offers some angles that are not commonly considered.

Johan Norberg is a senior fellow at the Cato Institute and a writer who focuses on globalization, entrepreneurship, and individual liberty.

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New trends in underwriting and credit

It is 2009 and one of the things we need to look at (at least from the mortgage market perspective) is the availability of credit. Many associations such as ISME and politicians such as Joan Burton have voiced strong opinion on the need for credit to be extended to small businesses. The same credit contraction is happening in lending for property.

While our firm, and almost everybody involved in the mortgage market accept that we are not at market clearing levels, the unavailability of credit for those who do wish to buy and are capable repaying their loans is going to cause an unnecessary distortion which will drive prices down further than is rational. Without getting too deeply into the reason for the credit contraction/deleveraging process which we have covered many times here before, the point of interest is the new brand of underwriting we are likely to see.

In the past people within the financial industry were looked upon favourably, not only due to the fact that they normally represented a …

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