Brendan Burgess
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Interesting article by Cliff Taylor in today's Irish Times
Cliff Taylor: High-cost Ireland set to continue punishing the young
The hard figures back up the perception of high-cost Ireland. Ireland is one of the dearest places in Europe to live. According to new figures from [broken link removed], the European Union statistical office, Ireland was the fifth most expensive country in the EU last year for a basket of goods and services, “beaten” only by Switzerland, Iceland, Norway and Denmark.
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Sky-high rents make it either difficult or impossible to build up a deposit for many, unless parents can step in. Housing costs are then high and banks charge an average of 3.55 per cent for a mortgage, compared with the 1.87 per cent average across the EU.
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Ironically, our high costs also make it more difficult for Government to address some of the key issues. Take house-building. It appears that the cost of building a house here is high by international standards. Wages for skilled labour are high, as is the cost of cement and other materials. Insurance costs and development levies add further to the bill. Add on VAT at 13.5 per cent and costs here are, on some estimates, 25 per cent plus higher for a normal apartment compared with other major cities.
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Why is Ireland high cost? Some of it represents the historical success of the “insiders” in various lobbies and professions in maintaining practices and prices that gouge the public or other businesses – take parts of the legal profession, for example. Some of it is because, as a small island economy, competition can be limited. Some of it is a legacy of the trauma faced during the bust. Insurance costs have soared because insurers priced everything way too low for a period - and are now overcompensating. Banks were bust and have got away with charging over-the-top interest rates for so long because others fled the collapsing market.
Cliff Taylor: High-cost Ireland set to continue punishing the young
The hard figures back up the perception of high-cost Ireland. Ireland is one of the dearest places in Europe to live. According to new figures from [broken link removed], the European Union statistical office, Ireland was the fifth most expensive country in the EU last year for a basket of goods and services, “beaten” only by Switzerland, Iceland, Norway and Denmark.
...
Sky-high rents make it either difficult or impossible to build up a deposit for many, unless parents can step in. Housing costs are then high and banks charge an average of 3.55 per cent for a mortgage, compared with the 1.87 per cent average across the EU.
...
Ironically, our high costs also make it more difficult for Government to address some of the key issues. Take house-building. It appears that the cost of building a house here is high by international standards. Wages for skilled labour are high, as is the cost of cement and other materials. Insurance costs and development levies add further to the bill. Add on VAT at 13.5 per cent and costs here are, on some estimates, 25 per cent plus higher for a normal apartment compared with other major cities.
...
Why is Ireland high cost? Some of it represents the historical success of the “insiders” in various lobbies and professions in maintaining practices and prices that gouge the public or other businesses – take parts of the legal profession, for example. Some of it is because, as a small island economy, competition can be limited. Some of it is a legacy of the trauma faced during the bust. Insurance costs have soared because insurers priced everything way too low for a period - and are now overcompensating. Banks were bust and have got away with charging over-the-top interest rates for so long because others fled the collapsing market.