Sunday 18 February 2018

Home Truths: Water and wine... and housing policy

Minister for Health Leo Varadkar. Photo: Gareth Chaney Collins
Minister for Health Leo Varadkar. Photo: Gareth Chaney Collins
Mark Keenan

Mark Keenan

COULD the Government's latest wheeze for a nine quid minimum price for a bottle of wine finally cause middle class city dwellers to crack?

Could Leo Varadkar's plonk-pinching trigger the final inevitable white collar explosion - by snatching away the last remaining Friday night comfort for couples with kids, who have no money left for any other fun?

To finally send them all-out baloobas and on to the streets in an angry blizzard of mocha polystyrene cups?

It might just be enough.

Could the big V do with wine to the super-stretched middle what his Government has already done to lower earners with water?

Probably not.

If there is to be a straw that finally breaks the back of Ireland's professional city-based middle-class camel - that weary beast which has carried almost the entire weight of austerity on its back since the Collapse - it will be housing that gives them the final hump.

Don't believe me? Take a look across the water. Thousands of Londoners marched last weekend in that city's first big protest for decades over housing. In a city where houses now cost 16 times the average income and where four out of five new homes are being bought by foreign investors, shortage has kicked in, rents have spiralled and those on low and middle incomes can no longer afford to live in their city. Foreign investors are buying 80pc of the new housing that does come on stream.

Does all of this sound recently familiar to Dubliners, Corkonians and Galwegians?

Press interviews with vocal marchers revealed not the usual contingent of Marxists and trade unionists that might be expected, but a surprisingly ticked-off middle class.

An angry teacher pointed out that her colleagues had two choices - to travel three hours a day to and from work or else share a home a reasonable distance away with three sleeping per bedroom. London needs teachers, but teachers can't afford to live in London, she pointed out.

A middle -aged university lecturer told the Guardian that he was paying two thirds of his salary in rent and as a result, he had no quality of life (bottle of wine?). An architect in his mid 30s asserted that city property policy was "ripping the heart out of London" by removing all but the very wealthy.

A recent report estimated that more than 600,000 native Londoners have been pushed out of their city over the past ten years thanks to property price and rent inflation.

Like London's middle classes, the incomes of mid-earning Dubliners have remained static or been cut back in actual terms over the last decade. In real terms they have shrunk alarmingly under a barrage of extra taxes and utility costs, many of them property based.

House prices in Dublin have also been increasing at a level comparable to London's - 20pc in the last year and Dublin's have risen by more than 50pc over the last three years.

In Dublin, non home-owning middle classes are paying twice to three times as much in rent as elsewhere thanks to Government policies that have kept construction levels flat, supply low, and sent prices high.

Now those who hoped to acquire homes have recently been headed off at the pass by the Central Bank's new loan restriction measures which, by definition, are only likely to prevent middle class city dwellers from purchasing (homes have long been out of reach of lower incomes in the capital and prices don't reach the €220,000 barrier elsewhere).

Threshold recently proved that less than 400 houses are for sale in the capital below that €220,000 10pc deposit line. At the same time, the new 3.5 times income borrowing limit fails in a city where an average family home costs eight to ten times an average income.

With rental, it gets far worse - a check of Daft.ie on Monday showed just 14 two-bed homes or larger available throughout all of Dublin City and County for €900 per month or less. Three years ago, a family semi could be got for that sort of money.

The Irish Independent's recently published property price survey conducted at local micro-market level, How Much Is Your House Worth? 2015, (now available online) shows that prices rose most through the last 12 months in Dublin's commuter counties with increases of up to 50pc. This has happened because price refugees from Dublin are now fighting it out with locals for existing affordable family semis.

All over austerity-pocked Europe Governments have been falling because the professional middle classes have turned.

Bottle of wine anyone?

Indo Property

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