Heck, you may just want to get on the first step of the ladder consisting of an affordable place to live out your years. Not everyone wants to make a killing out of property by scaling the ladder, with their eye on bigger and better houses.
You may have seen a bit of property porn in a newspaper last week which hyped up a tiny cottage in Ranelagh, Dublin, costing €525,000. The photos looked great. The cottage had that ‘artisan’ vibe, which is an over-used adjective churned out for everything from sourdough bread to twee shops selling enamel jugs.
The word reeks of good taste, which supposedly justifies the saucy price tag.
That artisan cottage in Dublin 6 was bought for just €110,00 nine years ago. Talk about making a fat profit. It calls to mind Celtic Tiger era prices. And we all know how that house of cards ended.
They have been hit particularly hard by the impact of the pandemic on the labour market. The ESRI’s latest findings show that there were 112,000 fewer 15- to 34-year-olds in paid work in the final quarter of 2020 compared to a year earlier. It also highlighted the fact that employment was 14% below its pre-pandemic level for those aged 15 to 34, compared to just 6% for those aged above this cohort.
The research warns that these job losses could compound the remaining effects of the financial crisis, which left almost a third more 20- to 24-year-olds not in employment, education or training compared to before the economic crash.
In its new report, the ESRI also revealed that a growing proportion of young adults are facing high housing costs relative to their incomes, which have been stagnating for workers in their twenties since the 1990s.
A very modest 10% stamp duty charge for controversial investment funds on the purchase of more than ten houses gives the green light to investors to carry on buying.
And apartments won’t be affected as the Government “recognise a need for investment in apartments,” said housing minister, Darragh O’Brien.
In other words, the vultures can keep buying apartments, which are generally rented by young singles. Rent is extortionate.
Long-term structural issues are at play here. With young people’s income used primarily for rent, they have no hope of making pension provision for themselves. And, unable to buy a house, they could be caught up in the bind of trying to make the rent right into their old age with nothing but the state pension (if it’s still in existence) to live on. Which, of course, won’t stretch to covering the rent.
It’s a deeply worrying vista. Homeless at 70 or 80? It’s about time the Government looked at the corrosive implications of its pathetic housing policy.
It could look at Vienna, for example, with its progressive social housing scenario. The city works with developers in a way that is socially responsible. Some 50% of all housing development must go to low income residents. The remainder generally goes to families on moderate incomes.
Tenants pay just 20%-25% of their income on rent. A tenant must be low-income when moving in to a home, but if their income increases, they don’t have to move out. The large amount of affordable housing could be said to make this more sustainable than cities in other countries where there isn’t enough affordable housing.
There is a stigma associated with social housing in this country whereas in Vienna, there is no such negativity. But the Austrian capital didn’t always have enlightened housing policy. in the late 19th and early 20th century, social housing was left to the devices of the private market and many people lived in abject poverty. However, during World War I, protections against rent increases and eviction of soldiers were introduced. These laws still hold up to a certain extent.
Also, those living in luxury housing paid a 38% tax rate whereas those in social housing only paid 2%. Astonishingly, back in the 1920s in Vienna, rent was a mere 5% of income.
Now, there is no guarantee in this country that a couple on two reasonably decent incomes can get a mortgage. And as for a young person trying to buy on their own, it’s out of the question. They’re stuck paying high rent, often higher than the cost of a mortgage.
Is the only housing policy in Ireland one that sees bricks and mortar as highly profitable rather than being the materials for a home?