Rising rents and property prices are threatening Dublin’s economy as they drive workers out of the city.
A majority of businesses (75 per cent) say “affordable housing to buy or rent” is the biggest challenge facing the capital, ahead of skills shortages, costs and energy security, according to the Dublin Chamber’s third-quarter business outlook.
“We are hearing from Dublin firms that housing is an issue in a league of its own, far outpacing other current adversities,” said Aebhric McGibney, the chamber’s director of public affairs.
“This is partly due to the direct impact of the tight labor market as potential employees are pushed out of the greater Dublin area due to a lack of affordable housing within a reasonable distance to commute.”
Manufacturers, restaurateurs and restaurateurs are increasingly hiring themselves to ensure they can get – and keep – the labor they need.
A Midlands-based manufacturer said the housing crisis is choking small businesses by driving up wage demands and increasing commute times and costs.
“Most business owners I know already have housing that they use for employees.
“A tire shop owner, in desperation, converted the garage next to his house into a lodging. He feels compelled to do this as he cannot get staff but cannot afford to buy a house to hire staff.
“Many others just buy houses and allow employees to stay there until they can find cheap and comfortable housing. Nobody I speak to wants to be in this situation, but it was forced on them.
“In the beginning it was about finding staff to grow, now it’s about just staying the same.”
In a survey by the American Chamber of Commerce in Ireland last week, US multinationals named housing as their biggest challenge.
But the problem is “widespread” outside Dublin and has been affecting smaller companies for years, said Neil McDonnell, chief executive of the Irish SME Confederation.
“What’s new is that it used to be just the little boys. Now the IDA companies are making noise about it.
“If you have to pay an average single bed rent of 1,600 euros in Dublin, think what that means in terms of salary for someone who’s going to work behind a bar or a waitress or something. It’s next to impossible,” said Mr. McDonnell
Between June and September alone, rents rose 4.3 percent, a record quarterly increase, and are up 14.1 percent year-on-year, according to accommodation website Daft.ie. Room rents have risen by over 13 percent over the year.
The average national rent was €1,688 in the third quarter, rising to over €2,200 in Dublin, where there were just 345 apartments available for rent as of November 1st.
National house prices rose 10.8 percent in the year to September, with areas outside Dublin seeing larger price increases, according to the Central Statistics Office.
Inflation soared 9.2 percent year-on-year in October – a level not seen since 1984 – and is expected to average more than 8 percent for the full year.
Corporate profit expectations have now fallen to late 2020 levels, according to companies surveyed by the Dublin Chamber.
https://www.independent.ie/business/jobs/housing-costs-threaten-viability-of-dublin-firms-chamber-warns-42180761.html Housing costs are threatening the profitability of Dublin firms, the Chamber warns