Bad news for the economy:Many foreign high tech workers reject job offers, finding Irish rents too expensive

Patslatt1

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Bad news for the economy:Many foreign high tech workers reject job offers, finding Irish rents too expensive

Since Irish economic growth depends heavily on the high tech sector, it is bad news for the economy that foreign high tech workers are rejecting job offers because Irish rents are too expensive. The Sunday Independent article August 13th "Housing crisis threatens to switch off supply of tech staff"(paywall) reported that tech focused recruiter Prosperity experienced a doubling to 30% in rejections of its job offers to candidates abroad this year "with many citing accomodation horror stories as the reason". In technology, up to 40% of workers come from abroad.

Those horror stories are likely to keep increasing for many years unless housing building doubles to 25,000 to 30,000 a year.

Introduction of rent controls setting rent increases at 4% a year adds to scarcity. Increases of more than 4% a year are likely needed to balance the market given the extreme shortage of rentals from lack of new housing coupled with pressure from immigration and population growth, especially in the Dublin region.

Rent controls with fixed increases prevent the market from working properly. There is less pressure on tenants to share accomodation or return home to live with parents. So newcomers entering the rental market face a smaller supply of rental accomodation and have to pay higher rents than in a free rental market. Key money brown envelope deposits may also be demanded of them.

Landlords' confidence to invest in rental housing has been damaged as rent increases are politicised by the hard left. In a general election year, the government may change its mind about the 4% increase.

An interesting question is whether the government is really interested in removing barriers to housing building instead of resorting to gimmicks like rent controls and taxes on vacant sites. The biggest barrier is NIMBY home owners who have a major influence on voting. Councils pander shamelessly to them in Dublin by creating vexatious planning red tape and failing to invest in sewerage and water infrastructure for new housing. Maybe the national government should take over planning permission decisions, though leaving local planning offices in place for local knowledge.

Taxes on vacant sites which generate no income could backfire by undermining the role of land banks which supply small and medium builders with sites. Without land banks, only the biggest builders could afford the risks of buying land quickly which might cause prices to explode and allow holdouts on the last pieces of land needed for a project to extort the builders.
 


JCR

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The banks are still trying to recover their balance sheets they went so mad. That's why building is not happening, if in fact it is even needed to solve the emerging crisis of housing sucking the life out of the economy.

There is no other plausible reason but you can add in powerful investors who want to get property values as high as possible and they are more powerful than our elected reps. A modern civilised country would simply release property onto the market or embark on building programs otherwise.
 

Outlaw101

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Since Irish economic growth depends heavily on the high tech sector, it is bad news for the economy that foreign high tech workers are rejecting job offers because Irish rents are too expensive. The Sunday Independent article August 13th "Housing crisis threatens to switch off supply of tech staff"(paywall) reported that tech focused recruiter Prosperity experienced a doubling to 30% in rejections of its job offers to candidates abroad this year "with many citing accomodation horror stories as the reason". In technology, up to 40% of workers come from abroad.

Those horror stories are likely to keep increasing for many years unless housing building doubles to 25,000 to 30,000 a year.

Introduction of rent controls setting rent increases at 4% a year adds to scarcity. Increases of more than 4% a year are likely needed to balance the market given the extreme shortage of rentals from lack of new housing coupled with pressure from immigration and population growth, especially in the Dublin region.

Rent controls with fixed increases prevent the market from working properly. There is less pressure on tenants to share accomodation or return home to live with parents. So newcomers entering the rental market face a smaller supply of rental accomodation and have to pay higher rents than in a free rental market. Key money brown envelope deposits may also be demanded of them.

Landlords' confidence to invest in rental housing has been damaged as rent increases are politicised by the hard left. In a general election year, the government may change its mind about the 4% increase.

An interesting question is whether the government is really interested in removing barriers to housing building instead of resorting to gimmicks like rent controls and taxes on vacant sites. The biggest barrier is NIMBY home owners who have a major influence on voting. Councils pander shamelessly to them in Dublin by creating vexatious planning red tape and failing to invest in sewerage and water infrastructure for new housing. Maybe the national government should take over planning permission decisions, though leaving local planning offices in place for local knowledge.

Taxes on vacant sites which generate no income could backfire by undermining the role of land banks which supply small and medium builders with sites. Without land banks, only the biggest builders could afford the risks of buying land quickly which might cause prices to explode and allow holdouts on the last pieces of land needed for a project to extort the builders.
So rents being so high is the problem but the solution to the problem is to increase rents, eventually rents will get so high that people will either have to go home to live with their parents or start cramming themselves into shared accommodation? This kind of scenario will attract foreign workers? I thought that high Rents and accommodation horror stories were keeping them away?

Sounds like you just want to keep pumping rents, literally every element of the post ended in a rent pump.

Oh, wait, I get it. Eventually there will be so many rent pumps that rents will start to decrease?

Great plan.
 

Outlaw101

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The banks are still trying to recover their balance sheets they went so mad. That's why building is not happening, if in fact it is even needed to solve the emerging crisis of housing sucking the life out of the economy.

There is no other plausible reason but you can add in powerful investors who want to get property values as high as possible and they are more powerful than our elected reps. A modern civilised country would simply release property onto the market or embark on building programs otherwise.
Yes this is more likely the cause. All the vulture funds who were sold property at an undervalue by the government, and who pay €250 tax on rental incomes of €3,000,000, also negotiated with the government a 7 year CGT exepmtion. The scheme ended in 2014 so government housing policy won't make attempts to resolve the shortages until at least 2021 so that the Vulture funds they did deals with can realise the gains on the properties they gave them at an undervalue through NAMA without paying tax.

The banks also have to get property prices up back up because it obviously improves their situation.
 

jpc

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Mr reality has been knocking urgently on the door on this subject along with insurance.
But no one in government or policymaking has been listening.
Will it be any different after this article.
Don't think so.
 

HenryHorace

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Bad news for the economy but good news for society.
 

PeaceGoalie

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Bad news for the economy but good news for society.
The Muslamics seem to be able to asfford trhe rents. Maybe the "IT" workers could get rent allowances like the 420 scammers
 

Outlaw101

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The Muslamics seem to be able to asfford trhe rents. Maybe the "IT" workers could get rent allowances like the 420 scammers
These Trump fellas are so unhappy with life. It drips from every word they type. If they weren't such nasty hate filled people you'd almost pity them. Unfortunately you'd imagine that it was their hateful ways that ended up causing their lives to be so miserable and unhappy. Maybe they were abused as children.

They seem to just want to make everyone as miserable and unhappy as they are. I have bad news guys, making people as unhappy as you are won't make you happy.
 

Orbit v2

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Rent controls with fixed increases prevent the market from working properly. There is less pressure on tenants to share accomodation or return home to live with parents. So newcomers entering the rental market face a smaller supply of rental accomodation and have to pay higher rents than in a free rental market. Key money brown envelope deposits may also be demanded of them.
I think rent controls are an acceptable short term measure.
Landlords' confidence to invest in rental housing has been damaged as rent increases are politicised by the hard left. In a general election year, the government may change its mind about the 4% increase.

An interesting question is whether the government is really interested in removing barriers to housing building instead of resorting to gimmicks like rent controls and taxes on vacant sites. The biggest barrier is NIMBY home owners who have a major influence on voting. Councils pander shamelessly to them in Dublin by creating vexatious planning red tape and failing to invest in sewerage and water infrastructure for new housing. Maybe the national government should take over planning permission decisions, though leaving local planning offices in place for local knowledge.
I agree a lot of it has been gimmickry, with unintended consequences. Eg sending projects straight to Bord Pleanala has turned them into a major bottleneck. There are delays of multi months with their decisions at the moment.
Taxes on vacant sites which generate no income could backfire by undermining the role of land banks which supply small and medium builders with sites. Without land banks, only the biggest builders could afford the risks of buying land quickly which might cause prices to explode and allow holdouts on the last pieces of land needed for a project to extort the builders.
More gimmickry. Also the latest wheeze of appropriating vacant homes could easily get bogged down in red tape, with little to show for it.
 

Analyzer

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Mr reality has been knocking urgently on the door on this subject along with insurance.
But no one in government or policymaking has been listening.
Will it be any different after this article.
Don't think so.
I am sure the government's media handling operstion is writing up some very impressive PR statements, to be released soon.
 
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Direct experience from colleagues is that they're not interested in taking up work in Dublin. One large company has been unable to fill a contractor position for over a year now because they cannot pay the rates demanded. They are offering a rate somewhat higher than the market rate Europe-wide, but the premium on renting makes it remain uneconomical.
 

Cruimh

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What difference will house building make except feed another boom and bust cycle?
There are plenty of houses.

We will only progress when we cease to regard housing as an investment and properly regulate the market.


We have plenty of housing stock and empty buildings that could and should be used, both for short term and long term provision of accommodation.


We need to get away from destroying our environment and heritage so that the greedy can make profits and all the associated political shenanigans and corruption. "Developer" is a euphemism for parasite.


Profits on House sales should be taxed at 90%, allowing for improvements and inflation. And 95% on second or subsequent homes. Houses should be for living in, not for people to treat as a commodity.


There should be little or no green field development - and land prices should be controlled - it is ridiculous (and an open invitation for corruption) that agricultural land's value can go sky high because of a Bureaucrat's signature - and the difference in value goes into someone's pocket, leaving the house buyers to pay through the nose and saddling himself or herself with a lifetime of debt.


Accommodation is as important as food - the state regulates and control's food prices, it should do the same in respect of housing.


Steps off soapbox.
 

Analyzer

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The most important objective in state policy is the accomidation of the two pillar banks, & NAMA.

The working cohort has been shafted again for favoured businnesses which can operate in what seems to be a case of market rigging. The role of state policy is to push up the cost of living on those working.

Socialism for the rich, competition for the poor.

And a massive ongoing bailout for the bsnking duopoly.
 

Analyzer

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The most important objective in state policy is the accomidation of the two pillar banks, & NAMA.

The working cohort has been shafted again for favoured businnesses which can operate in what seems to be a case of market rigging. The role of state policy is to push up the cost of living on those working.

Socialism for the rich, competition for the poor.

And a massive ongoing bailout for the bsnking duopoly.
 

Mad as Fish

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Too many eggs in the one basket, chasing hi tech with hardly any regard for other sectors has brought this about if I''m reading the OP correctly. So let's start pumping our industry instead, yes we do have an industrial base, especially within the agri sector where Irish machinery has a terrific reputation abroad for its durability. Indeed, as the Farmers Journal pointed out this week, strip away foreign companies parking their profits in Ireland and other dodges and it is the overall agri/food sector which is the major driving force in the Irish economy. Ireland is good at farming, despite the doomsters telling us we should hand it over to the Dutch with their toxic phosphate levels and tasteless tomatoes, so lets get back to basics and stop pissing about with self interested hi tech opportunists.
 

Analyzer

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By the time the banking duopoly are bailed out, the Tech bubble will have burst.

Which will presumably have solved the problem.
 

Prester Jim

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What difference will house building make except feed another boom and bust cycle?
There are plenty of houses.

We will only progress when we cease to regard housing as an investment and properly regulate the market.


We have plenty of housing stock and empty buildings that could and should be used, both for short term and long term provision of accommodation.


We need to get away from destroying our environment and heritage so that the greedy can make profits and all the associated political shenanigans and corruption. "Developer" is a euphemism for parasite.


Profits on House sales should be taxed at 90%, allowing for improvements and inflation. And 95% on second or subsequent homes. Houses should be for living in, not for people to treat as a commodity.


There should be little or no green field development - and land prices should be controlled - it is ridiculous (and an open invitation for corruption) that agricultural land's value can go sky high because of a Bureaucrat's signature - and the difference in value goes into someone's pocket, leaving the house buyers to pay through the nose and saddling himself or herself with a lifetime of debt.


Accommodation is as important as food - the state regulates and control's food prices, it should do the same in respect of housing.


Steps off soapbox.
Largely agree with the sentiment but I think that the only way to sort out housing now (for the last 5 years) is to build lots of social housing or the state to get directly involved in building.
The govt are ideologues and they are obsessed with neo-liberal free market ideology, it 100% clearly hasn't worked here, we need more regulation and we now know for sure that we cannot rely on developers to fill the gap in the market because they want to maximise profits at any cost, they are like the supermodel who won't get out of bed for less than 10,000. We don't need her to work but we do need houses desperately and the state has a responsibility to fill the gap created by their idiotic faith in a failed doctrine.
 

Prester Jim

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Hilarious that patslatt's solution to the disastrous housing crisis is to give yet more profit to landlords. Him being a landlord has nothing to do with that of course...
 

gleeful

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This problem is serious and needs to be sorted but we shouldnt imagine its a uniquely Dublin problem. Rents are rocketing in just about every tech heavy city. Rents in London, paris, Stockholm, etc, are all mental.
 


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