Everybody knows the decade-long property boom has produced huge profits for investors, priced out young buyers and led to development on a scale the country has never seen before. But there have also been a lot of unexpected indirect effects.
For example, the property boom has boosted Dublin’s tarantula population. It led to a departure of nuns and has been crucial to the formation of the suburban boy racer. Read on for 20 surprising effects of the property boom.
1 Boy racers
Ever wonder why mature middle-class estates seem to have four times as many cars as houses? With little chance of being able to afford to buy a home of their own, stay-at-home youngsters with reasonable salaries spend their money on new cars instead. For thousands of twentysomethings, it’s a case of the boom bringing vrooms not rooms.
2 Tarantulas
At least one tarantula is sold in Dublin’s city centre each day thanks to the apartment property boom, which kicked off with the redevelopment of Dublin’s jaded after-dark city centre.
A spokesman for Boardwalk Pets, on Dublin’s Liffeyside at Wellington Quay added: “There’s no dogs, cats or even birds allowed. Apartment dwellers who want pets are buying spiders, reptiles and frogs instead. We sell about 40 tarantulas a month.”
3 Twice as many cats
Even though Dublin has nearly a third of Ireland’s population, family homes comprise only a small proportion of the housing stock being built. Most are apartments or duplexes, and those houses that do go up are often terraces or semis with tiny gardens. With less outdoor space, owners are finding it hard to accommodate dogs. According to the Dublin Society for the Protection of Cruelty to Animals, high-density living is behind a doubling of the city’s cat population.
4 Half as many nuns
Until the mid-1990s, charitable religious orders owned huge tranches of land in Ireland, particularly in built-up areas. Surging land prices enabled nuns to sell their land at high profit and channel these resources into setting up new foreign missions to tackle issues such as Aids in Africa.
5 Millionaire teachers
Twenty years ago, agents would tell you you couldn’t sell a house on Shrewsbury or Ailesbury Road — but now they are selling for tens of millions. Likewise, what were once very average semis on Dublin’s southside and choice northside locations are now worth €700,000-plus. Plenty of properties like this have been inherited, which means many state employees on average wages are worth €1m-plus on paper.
6 City flooding
Engineers in Dublin’s councils cite the decade-long surge in development as one of the main reasons for the increase in flooding in recent years. The huge reduction in green areas has affected the ability of the soil to soak up rainwater.
7 Water shortages
Rapid development to cope with the demand for homes has also led to stress on existing utilities’ infrastructure. A record 80,000 new homes a year require water, electricity and sewerage. Low reservoir levels mean we can expect hosepipe bans again this year on the eastern seaboard.
8 A new love for Kinnegad
House-price refugees who can’t afford a home in the capital have been spilling out further into the surrounding counties for more than eight years. Who would have thought that towns such as Kinnegad in Co Westmeath, for decades grim and depressed places, would become suddenly resurgent? Kinnegad, like many ailing towns, has been revived by an influx that has recharged local schools, businesses and community spirit. The last development there sold off plans within a few days, while this year will see the launch of the town’s first apartment scheme.
9 Courting in cars
Visitors to Italian cities may have noticed how, at nightime, beauty spots are filled with wobbling cars with window blinds closed. This is because cities such as Rome and Naples have an accommodation shortage. Sons also tend to live at home with their “mama” until they get married, often in their mid-thirties.
With thousands of Irish youngsters still living at home because their wages won’t make a mortgage multiple, the options for entertaining company are becoming as limited as those in Italy.
10 Irish carpetbaggers
Who would have thought estate agencies in small towns would be advertising apartments for sale in Bulgaria? Or that Irish businessmen would be vacuuming up world landmarks such as the Lloyd’s building in London? Rich with equity and a belief that property cannot go askew as an investment, the Irish spent between €3 billion and €6 billion on overseas property last year. Developers who have made hundreds of millions in the domestic construction boom are reinvesting in key commercial buildings abroad. Three weeks ago it was announced that Irish investors have acquired two British regional airports, while one developer has acquired a 12km-long stretch of Beijing.
11 British builders
Pre-property boom, the Irish travelled to work abroad in construction. Today our boom has brought these people home, where they have stepped up the salary and skills ladders. The shortage of home-grown workers has brought an influx of labour from abroad, including supervisors from Britain and Germany in search of better money.
12 Money talk
You can’t have a dinner party any more without discussing the price of property. The property boom means that almost anyone who has owned a house for two years or more can point to substantial equity gains — and talk about it.
13 Artificially conserved marriages
Last year divorce figures showed Irish split rates are lower than in most European countries. If couples see their homes split 50/50 in the courts, they’ll find it far tougher to raise loans for a property each as a result of higher prices. This has led to speculation that the high cost of property here is keeping separated couples together.
14 The €40,000 parking space
The shortage of exposed ground due to infill schemes and redevelopment in the capital means parking has never been more expensive. Pension-fund-owned multi-storeys charge €2,000-€4,000 per year. Spaces in good areas now sell for €40,000, while few central apartment schemes offer a space for less than €20,000.
15 The demolition of perfect homes
With land scarcity in Dublin providing builders with a headache, a trend has arisen for acquiring two or three houses in a row, demolishing the lot and using the site footprint to build a higher- density apartment block. Three cottages worth a combined €1.2m can in this way facilitate 20 apartments worth €6m.
16 The lifetime mortgage
Not long ago mortgages all came with a standard 20-year repayment life. A typical new mortgage today is as likely to run for 35 years, taking a 25-year-old buyer to the age of 60. In the meantime, remortgaging has taken off and will extend the period of the loan still further for many.
For middle-aged folk finally getting to the end of their 20-year plan, remortgaging to provide junior with a deposit on a new home or apartment has also become the norm.
17 The begging banker
Thanks to the huge growth of the mortgage sector, and increased competition in the enlarged home purchase market, banks are now begging us to take money off them.
Few quarters go by without a spanking new product or offer to lure us in or without an unsolicited offer falling in the letterbox.
18 Healthy national finances
Figures released last month show that stamp duty on property dealings nationally contributed a third of all the money raised for the exchequer in the first quarter of the year. Builders estimate that the government itself, through taxes on materials, labour and other one-off payments, will take about 40% of the price of every new home sold in Ireland. Local authorities routinely seek an average of €15,000-plus per unit from developers and have now started badgering homeowners for €5,000 plus charges for extensions. If the property market reverted back to pre-boom levels, the loss of this tax income to the state would be catastrophic.
19 Property as news
The market’s dealings are no longer confined to property supplements. We now live in a country where a third-rate celebrity’s home purchase can eclipse stories on health, politics and current affairs.
20 Blind faith
Before the boom, an investment in property was regarded as a midrange risk. Never before did governments consistently tell the population, as they have in recent years, that there would not be a collapse in the property market. But pre-boomers will remember that in 1984 property prices were falling. However, last week’s survey by IIB shows that most people believe the market will continue to grow, despite clear warnings of overheating from AIB and Friends First.
