Irish Examiner View: Society and big business out of kilter as builder’s profits up 28% in a year

Housing, or rather the lack of it and the disproportionate, life-draining cost of it, was the decisive issue for voters under 35 in last month’s election, just as it was for some of their parents and grandparents. That disenchantment with a failing, unchallenged system means that once-unimaginable Leinster House alliances may materialise.

The parties shackled to the philosophies that midwifed the housing crisis might yet have one last throw of the dice. It is though, in the cold light of day, unrealistic to hope that an alliance between Fine Gael and Fianna Fáil might embrace a new housing policy so any subsequent election — and who would bet against another one this year? — would be defined by the housing and homelessness scandals but probably even more forcefully.

The February 8 vote expressed dissatisfaction with an increasingly inequitable society. Echoing that festering, the recent report by the McKinsey Global Institute, The Social Contract in the 21st Century, found that despite economic growth, abundant employment and the prospect of living longer there is an escalating international mistrust and loss of faith in institutions. Is it any wonder?

After all, that stabilising construct that has sustained the West since 1945 — the vague but solid social contract — is being dismembered one protection, one quid pro quo, one pension deal at a time. That McKinsey found that young people have less secure employment, yet must spend a greater proportion of their income on everyday needs, feeds that narrative. So too does the finding that today’s young people have just one third of average adult wealth though a generation ago their peers had two-thirds.

That narrative will not ignore, nor could it, the news that builder Glenveagh Properties may sell 450 planned apartments in Dublin to an international investment group, Round Hill Capital. If this €250m deal is concluded it, like many others, it will push these apartments beyond the reach of most individuals and turn even more citizens into tenants for life with all the vulnerabilities that entails.

It is not an exaggeration to argue that this is a nascent recolonisation of Ireland. It also suggests, though it is impossible to confirm, that the investors expect open-ended demand for rental accommodation and that they are confident a rent freeze will not be imposed. Nor do they anticipate housing supply growth on a scale that might curtail demand for their apartments.

That narrative will also, and entirely appropriately, consider yesterday’s report from Cairn Homes that the company’s profits rose by 28% last year, pushing the figure to €68m. Dublin-listed Cairn said yesterday revenues grew 29% to €435.3m, up from €337m in 2018. Cairn expects to sell up to 1,300 properties this year the majority of which are aimed at first-time buyers.

These figures, albeit on a smaller stage and in a different vocabulary, speak every bit as loudly as last month’s election result. They represent a significant business achievement but it is increasingly difficult to think of them as a socially sustainable. How this equation is rebalanced will define a lot more than the next election. It will decide if this is an economy or a society and if capitalism serves us or we serve it.