Property and the squeezed middle
Since the financial crisis, Ireland's love affair with property has waned but this is still a nation of property owners, and aspiring owners, many within the middle classes. There is little doubt the crisis threatened the security of the middle class, a threat which has still not fully receded; however, after the crisis there is now an opportunity to build a new social consensus for all citizens to share, a challenge which is giving rise to political anxieties, although not to the extent it is in other parts of the world, with the middle class here certain to contribute signifiantly to building of that new Ireland.
In an interview in this newspaper today, the Taoiseach, Leo Varadkar, tells of his concern for people who want to buy a home for the first time, referring to those in his own age group, late 30s, who have not yet bought property. People used to often buy a home in their 20s, he says, but because of the recession there are now a lot of people of this age and older who rent and would like to buy a home.
It may be that the crisis has ushered in a new era in which the middle-class aspiration of property ownership will remain beyond the reach of many in this new generation and that the relative norm elsewhere of rented accommodation will apply for a considerable time. While Mr Varadkar is correct to say that property prices are 30pc under peak, home ownership still remains beyond the reach of a great number of his generation (and an indebted burden to many others). The reasons are complicated, not solely related to supply to meet demand which is rather simplistically argued by some. Mr Varadkar would be wise to adopt a co-ordinated policy approach if equilibrium is to be restored to the property market, not least to actively manage investment behaviour as was urged by a writer in this newspaper last week.