Europe’s housing crisis has almost a quarter of its citizens considering emigrating in search of a more affordable life, and conditions are no worse than in Ireland, a major survey of renters and homeowners has found.
A survey of 20,000 Europeans conducted by Opinium for real estate group RE/MAX found that 33% of Irish people were considering moving to another country amid declining affordability in the country. Across Europe, this is only topped by Malta.
“There is a huge affordability crisis at a level we have never seen before,” Michael Polzler, CEO of RE/MAX Europe, told Property.
One-fifth of RE/MAX survey respondents said they were struggling or really struggling to afford housing costs, while another 37% said they were just barely coping with affordability. The proportion of people struggling to find accommodation in Ireland is among the highest in Europe.
Housing crisis in Ireland
The specter of emigration lingers in Irish history, marked by a severe famine between 1845 and 1852 that caused around 2.1 million people to flee the country. However, Ireland has recently faced emigration problems, this time related to financial pressures.
Following the collapse of the “Celtic Tiger” amid the global financial crisis, the number of people leaving the country increased again, with 386,100 people emigrating between 2009 and 2013.
The latest survey data from RE/MAX shows that despite strong economic growth and a multi-billion dollar surplus, rampant falling prices could trigger a mass exodus of the Irish population.
“I think when you look at a very stressful situation, like in Ireland, if they had the opportunity to go somewhere else, they would do it because it’s a very stressful situation,” Polzler said.
Ireland rejuvenated its economy after the financial crisis by luring US tech giants such as Meta, Google and Apple to set up European headquarters in the country with competitive corporate taxes.
The push towards foreign investment has undoubtedly brought money and well-paid jobs to Ireland while increasing the country’s GDP.
“But you can’t do that without housing,” Polzler said.
It is true, Ireland is critically short of housing stock to accommodate its growing population. Ireland’s central bank says 52,000 homes need to be built in the country every year if demand is to meet supply.
Meanwhile, residents are struggling as the average rent in Dublin stands at €1,829 per month.
Homelessness in Ireland has been increasing since mid-2021 and reached a new record high of almost 14,500 people in January.
RE/MAX’s Polzler said a common problem across Europe is the failure of governments to build more housing.
“The government has been very slow in granting permits for new construction,” Polzler said. “Even if a builder wants to build, they have to pay a lot of money to get permission to do so.”
Tighten the belt
RE/MAX survey shows most European homeowners are tightening their belts to absorb rising mortgage costs.
Interest rates in the Eurozone rise to a near peak of 4.5% in 2023 as inflation reaches double digits. This increases the mortgage for homeowners, which often affects rental prices.
Four in 10 respondents said they had cut back on spending or wasted money on holidays, possibly explaining the drop in demand for flights this year.
Speaking in May, Michael O’Leary, CEO of Irish airline Ryanair, said he felt a “feeling of recession” from European passengers ahead of the usually busy summer travel season.
Meanwhile, more than a quarter of respondents said they had canceled subscriptions to services such as Netflix, Spotify and magazine memberships.
“Anything that isn’t strictly mandatory gets cut because there’s no other way,” Polzler said.
