If you are trying to buy your first home, you will have guessed that the game is rigged against you. While you might get lucky, the chances are that in or near Dublin or any bigger urban area, you will pay €300,000 to €400,000 for a home. This means you have €30,000 to €40,000 cash and earn €77,000 to €100,000 a year.
Those costs look unlikely to drop. Builders are slowing the rate at which they produce new homes because they cannot sell some of those they have already finished, as they are too expensive.
So experts – such as Dermot O'Leary, an economist with stockbrokers Goodbody – believe we will get 21,000 new dwellings this year, against an originally predicted 22,000, while O'Leary thinks he may have to cut his forecast for 2020, which is 24,000. These numbers are short of the 30,000 or so new homes that most believe the Republic needs to build.
It costs about €180,000 to build an average family home. That excludes the builder’s profit, the cost of the land used, and State taxes and levies, which all push up prices. So, when you buy a home, you pledge a chunk of your future income to these parties and the bank that loans you the money.
While builders, landowners and banks act in their own interest, the State should be protecting yours. Instead it does most of the rigging. It is our biggest landowner. Its agencies determine how many homes are built and where, and what land gets the utilities, roads, water supply, needed for this.
Seemingly ignoring its own power in all of this, the Government says we have a housing “market”, which will soon be functioning “normally”. Unsold houses and slowing construction in the face of a shortage show this is a myth.
The State could ditch this myth, build social housing, on the one hand, and make serviced land available, reasonably, where it is needed, on the other. The Government has not done this for one of only two reasons: either Ministers and civil servants naively fail to recognise the State’s own ability to tackle the problem, or they are happy to continue rigging the game against you.
