Ireland’s housing crisis undermines new investment – IDA – BBC News

image source, Getty’s image

Caption,

Recent studies estimate that a third of all wages in Ireland are paid by multinational companies

  • Author, John Campbell
  • Role, BBC News NI economics and business editor
Glance

  • New economic warning of the country’s housing crisis
  • The infrastructure shortage has left people facing soaring rents
  • Growth has been “muted” among existing companies

A walk around Dublin’s Silicon Docks can help you understand how important foreign investment is to the Irish economy.

Salesforce recently opened a large new office campus in North Wall Quay.

On the other side of the Liffey River Google’s operations occupy several buildings around the Grand Canal Dock.

Recent research by economist John Fitzgerald estimates that by 2021 a third of all salaries in the state will be paid by multinational corporations.

But there are fresh warnings that the country’s housing crisis is undermining its competitiveness and its ability to compete for new investment.

In recent weeks the heads of Ireland’s inbound investment agency, IDA, and their predecessors have used a public platform to emphasize the economic risks of the housing shortage.

The collapse of housing construction following Ireland’s property and banking crises has led to infrastructure shortages that leave young people in particular facing soaring rents and overcrowding.

“Housing is a challenge,” IDA chief executive Michael Lohan told the Irish Times Inside Business podcast.

“Our clients have told us they see growth opportunities in Ireland. But we need to solve the carrying capacity and housing issues are one of these major issues.”

Mr Lohan said his concerns were twofold: the impact on the organic growth of existing companies in Ireland and potential new investors having confidence there would be housing for workers and their families.

He acknowledged the government was executing plans to increase housing construction but added: “We need to speed up our response.”

He said there was no evidence that new investment had been lost to the housing shortage, but that it had “reduced growth” among existing firms.

image source, Getty’s image

Caption,

Ireland’s housing crisis has seen rents soaring and overcrowding

‘Serious deterrent’

Mr Lohan’s predecessor Martin Shanahan, who is now a senior executive with business adviser Grant Thornton, spoke at the Institute for International and European Affairs in Dublin.

He gave a generally optimistic assessment of Ireland’s ability to continue winning foreign direct investment but warned that the “biggest single threat” was complacency.

“Ireland has no inherent rights to the foreign direct investment that we win every year. We have to be competitive as a country to do that.”

He identified housing as one of a number of infrastructure issues that needed to be addressed.

He said: “The cost and availability of housing is a serious barrier for those looking to make a home and work in Ireland.

“This is and will act as a drag on future investment and the ability of existing investors to grow in Ireland.”

He warned that Ireland was not delivering infrastructure improvements “companies can go elsewhere”.

The Irish government says its Housing for All policy is aimed at increasing the supply of all types of housing – social, affordable buy, rent and private.

It aims to reach a point where an average of at least 33,000 homes are delivered annually.

In April the government approved additional measures that it said would make it cheaper to build and refurbish homes, speeding up home construction and lowering overall building costs.

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