Top employer offering loans so new staff can afford to rent in Dublin
EY forced to create programme to help recruits take up jobs
One of the country's biggest employers of new graduates has been forced to introduce interest-free loans to help new recruits secure rental accommodation in Dublin.
The country managing partner at accounting and advisory giant EY, Mike McKerr, has told the Irish Independent that his firm is providing the interest-free loans on flexible terms to graduate trainees in order to ensure that they are able to secure accommodation and so take up placements in Dublin.
The move is a clear signal that the housing crisis is now seriously threatening to choke economic development.
"For the first time, we have offered all graduate recruits interest-free loans to get them over the hurdle of getting set up in Dublin," Mr McKerr said.
Average rents in Dublin city centre are now €1,741 a month, according to the latest survey from Daft.ie.
Even then, shortages mean that it can take weeks to find a place to live. Some landlords in the capital are now demanding two months' rent deposit to secure accommodation, which is beyond the budget of many.
EY took on 248 graduates in the past financial year. A role with the firm is seen as a springboard to a professional career. In May of this year, the firm was named Graduate Employer of The Year at the Gradireland awards. Starting salaries for new graduates, who train with the firm, range from €24,000 to €31,000.
The loans scheme reflects the difficulties in the housing market and can be drawn down if needed, Mr McKerr said.
EY is able to recoup the money through its payroll, so it is effectively an advance on wages.
It has seven offices across Ireland, but the loan scheme is only needed in Dublin, where the accommodation crisis has created a danger that some recruits won't be able to take up jobs.
The news comes as the American Chamber of Commerce in Ireland, which represents big US employers here, warned that lack of housing risked making the country less attractive for investment.
AmCham members are the backbone of Ireland's foreign direct investment (FDI) sector and employ 150,000 staff here.
Yesterday, IDA chief executive Martin Shanahan downplayed the immediate risk to investment danger, but admitted that the housing crisis is now being raised by potential investors when they look at Ireland.
"We are aware, obviously, that residential housing is a challenge at the moment. It is a function of a rapidly growing economy and the fact that Ireland has strong demographics," he told RTÉ Radio One's 'This Week'.
"I think what the AmCham are doing in their report is pointing to the future demand.
"It is something that companies would point to as an issue. They want to ensure going forward that there are plans in place for the supply of residential housing, but also that the it is a Government priority and that steps are being taken."
However, he added: "[Housing] is not something that comes up in every meeting. [It is] not something that is causing a huge amount of difficulty for us [the IDA] at the moment."
Earlier this year, Mr Shanahan raised the housing issue at the annual conference of the Society of Chartered Surveyors Ireland (SCSI) at Carton House in Kildare, when he told construction executives that the "availability of quality and affordable residential accommodation" was "a key competitiveness factor for FDI".