IDA: Housing crisis not unique to Ireland

Investment agency the IDA prepared a series of documents for its executives after multinational companies raised concerns over “constraints” and “clear market failures” in the residential property market.

IDA: Housing crisis not unique to Ireland

Investment agency the IDA prepared a series of documents for its executives after multinational companies raised concerns over “constraints” and “clear market failures” in the residential property market.

Executives from the IDA were advised to say the country’s housing shortage was “not unique to Ireland” in the guidance documents.

The IDA prepared a series of briefings for staff on what to say when issues around rising property prices, spiralling rents, and homelessness came up for discussion.

Copies of the briefings reveal the IDA prepared data showing monthly rents in Dublin were still competitive by international standards.

According to the latest briefing report from September, the price for a small “one-person apartment” in Dublin came in at just above €1,000 per month.

Taking figures from the Nestpick ‘Furnished Apartment Index’, this meant Dublin was almost half the price of San Francisco, and significantly less than other major investment centres, including New York, Hong Kong, and London.

The briefings emphasised that rental prices in regional locations in Ireland were “very competitive”.

While standardised average rent in Dublin was stated to be €1,436 per month, average rents in Cork and Galway were just over €1,000. In Waterford, it was €674, according to the records.

For property purchases, the briefing said average residential prices in Dublin, at just over €400,000, were “competitive compared to competing larger cities”.

Average property prices were at least 50% higher in Paris, Zurich, and Geneva, according to the documents.

Ireland did not compare so well to cities such as Milan, Prague, and Frankfurt.

“Regional cities compare exceptionally well to other competing cities,” said the briefing, with average prices in Cork and Galway below €200,000.

The briefing said that there were “hugely positive trends” in the residential property market.

It said first-time buyers were in a much better financial situation now than at the height of the boom.

“The average first-time-buyer working couple uses 21.2% of their net income to fund a mortgage in Ireland — this was 32% in 2007,” it said.

It boasted that new home completions had reached 16,274 units over the past 12 months, an increase of 256% when compared to 2013.

It was pointed out that 2013 had been the “bottom”, when just 8,300 homes were completed, and that this had fallen from 77,600 at the start of the recession.

The briefings are based on a series of quarterly housing reports commissioned by the IDA from estate agent Lisney.

The reports will cost €24,000 over a two-year period and were started specifically because of concerns from large companies about the Irish property market, according to documents obtained under the Freedom of Information Act.

An internal record from March explained why they had been commissioned.

It said: “Due to the current constraints in the residential property market and clear market failures, a number of multinational companies currently in Ireland have indicated to IDA that property and most notably residential property is one factor challenging increased investment in a number of locations throughout Ireland.”

The IDA said the briefing documents were prepared to inform executives about housing conditions across Ireland and provide international comparisons.

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