The Celtic Tiger eats its cubs

Did you not know that the grass is 40 shades greener in Ireland?

Ireland with a modern liberal oulook, friendly locals, lots of craic*, plenty a’drink, a booming economy with a shortage of workers for high paid jobs in multinational companies like Apple, Google, Micosoft.

Well, you may need to take off your shamrock-tinted glasses and call that the blarney that it is.

The Gentleman himself is of Irish blood and despite being exiled for the last number of years, I still keep an eye on what’s happening on the Emerald Isle.

Back around 2005, I had the option to start work after graduation in Ireland, but the cost of living back then put me off.  Actually, it was spending €7 on a bottle of white wine that would have tasted better sprinkled on a salad or chips than drunk by the glass.  Anyway, I decided that unless I could get a very well paid job, it didn’t make sense to put up with the huge cost of living and general expensiveness of the Celtic Tiger Ireland during the boom years.

Maybe that was a good decision – because Ireland had a major crash that ruined many young people of my generation, led to net emigration for the first time in 30 years as young people left Ireland in their droves, house prices dropped by over 50% and the country went cap in hand to be bailed out at huge cost.

Fast forward 10 years and the good times are here again.  It’s now more expensive to rent in Ireland than it was at the peak of the BUBBLE with Average rents reach all-time high of €1,304 per month.  That is about €15,500 a year!  A huge amount and it’s even more if you want to live in or around a city which has the jobs that you may need to work to pay the rents.

This is a rat race and it’s a very unfair situation for the majority of people.

High house prices don’t benefit a soceity overall.  They don’t really benefit homeowners because you can’t eat your house  – you have to live somewhere and unless you are downsizing, you can’t benefit from the increase in the underlying asset value.  You can MEW but that only benefits the banks.

Coming to the banks – they benefit from you paying more and more money in form of  interest on your mortgage.  Especially from risky people on high LTVs – don’t worry if they go bust, the tax payer will bail the banks out.

For a young person living in Ireland today, you can try renting yourself for €15,500 a year (that’s on money you’ve paid tax on already) or just stay living at home – if your parents still put up with you.  Or you can try buying – but prices are high and the majority of developments in Ireland where you can buy a home are in the commuter belt – so factor in buying a car if you want to live the Celtic Dream.

It’s a lot easier if you have rich parents who can lend you the money or gift you a property but if you don’t, then life is pretty rough.

And the result of having a boom where not all boats are lifted by the same tide is spelled out in the artice here by the great David McWilliams.  David McWilliams article talks about how people who didn’t benefit enough from 20 years of rampant inflation, are now left behind permanently and unable to form the same families that was possible 20/30 year ago.

For me, it’s all a bit sad but viewed from afar.  The Gentleman’s Family will travel to Ireland for the first time ever next year (2019) and I’ll see what’s changed in the 10 years since I’ve been.  My feeling is that I’ll not get homesick and I’m happier in Scotland for better or worse.

*That would be craic as in fun not crack as in cocaine

2 comments

  1. I was lucky and married into an Irish family, and we visit regularly.

    I think you will find its the same old Ireland in terms of how you will feel about it, beautiful, cosy and warm whilst still constantly raining, people will moan, people will laugh and people will eat and drink, same old Ireland. The BS you read about it from afar is the same BS you would read if you were living over there and looking back at the UK…..

    This is not to cast off the problems of the country that you have mentioned as irrelevant, i just think when you are there, it won’t feel that different to what you remember.

    Like

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