Lack of housing is stunting Cork's economic growth, says Ibec
The National Planning Framework anticipates Cork will become the fastest-growing city region in Ireland.
Companies large and small in Cork have one problem in common. They are struggling to house new staff.
Many have interviewed potential employees and offered them jobs, which were at first accepted but eventually turned down due to the lack of housing in Ireland’s largest county, said Ibec chief economist Gerard Brady.
“Housing is the number one domestic issue facing businesses right now,” he said.
Firms in every sector are being impacted by the housing crisis, from manufacturing companies, to technology businesses, said Mr Brady.
However, SMEs in particular are struggling to grow amid housing shortages. “For multinationals, it’s a bad situation but they have resources. SMEs have limits to how they can support staff,” Mr Brady said.
The debate around Dublin becoming overcrowded has heated up in the last few years, but Mr Brady said many who want to relocate to another location like Cork see it as taking a risk due to the lack of available and affordable accommodation.
Meanwhile, a recent survey, commissioned by Ibec and carried out by Amárach, found 59% of people already living in Cork said their general quality of life had disimproved in the past five years.
When asked what would make the biggest difference in improving their quality of life, many of the respondents said affordable housing.
Veteran property developer Michael O’Flynn, chairman and CEO of the O’Flynn Group, said young workers were suffering the most from the lack of available and affordable accommodation.
“They are financially pressed by ever-higher rents and the receding prospect of homeownership. This ultimately spills over into issues around wellbeing and productivity in the workplace,” said Mr O’Flynn.
“This can be a struggle when trying to fill roles due to a lack of adequate affordable accommodation,” he said.
Mr O’Flynn made these comments at an Ibec meeting with business leaders in Cork to discuss housing as part of the lobby group’s ongoing Better Lives, Better Business campaign, having published a major housing report, Better Housing, Better Business.
“Housing is a key component of competitiveness, it impacts on the attractiveness of Ireland as a location for investment,” said Helen Leahy, head of regional policy at Ibec, at the event.
Cork is Ireland’s second largest economic region, with a population of more than 580,000. The National Planning Framework anticipates Cork will become the fastest-growing city region in Ireland, with a projected 50-60% increase in its population by 2040. Concerns are growing that there will not be enough accommodation to support this growth.
“A well-functioning housing sector is critical to the overall health of society and the economy and has a direct impact on the cost of living and wage demands,” said Ms Leahy.
Ms Leahy said a range of measures were required to improve the viability and affordability of homebuilding, such as addressing emerging financing deficits, reform of the planning and procurement system to speed up delivery and significant investment in skills and modern methods of construction.
“From an affordability perspective, our proposed fiscal measures would reduce the cost of a typical €400,000 new home by €30,000 and this could be achieved with immediate effect,” she said.
In February, the average rent in Cork City climbed to €1,768 and €1,327 across the rest of the county, according to figures provided by accommodation website Daft.ie.
Housing issues are not unique to cities like Cork and Dublin. Businesses in other areas including Tipperary are struggling to expand due to a lack of housing for staff, warned the county's Chamber of Commerce chief executive Michelle Aylward late last year.
These concerns by the chamber echo the findings in a report published in October 2022, which showed the housing crisis was having a “major” impact on companies trying to hire new staff.
The lack of housing supply in cities, in addition to soaring costs, is leading to a rise in emigration, further emptying the talent pool, the report by Morgan McKinley showed.
The report found many skilled workers had emigrated to Australia, the UK, and Canada.
