Ireland’s acute housing shortage is adding to problems faced by larger firms as they try to lure talent from abroad, according to the head of the country’s state agency for business.
(Bloomberg) — Ireland’s acute housing shortage is adding to problems faced by larger firms as they try to lure talent from abroad, according to the head of the country’s state agency for business.
“It’s a big pinch point,” Enterprise Ireland CEO Leo Clancy said in an interview. “We’re a full employment economy as things stand today, more or less. That means that we need to still bring a lot of talent to Ireland, and that’s where housing bites specifically.”
The warning comes as Ireland grapples with an chronic shortage of homes, particularly in the rental sector, which is being squeezed by a mass exodus of private landlords. On average, 40% of house sale instructions came from landlords selling investment properties in the final quarter of 2022, according to the Society of Chartered Surveyors Ireland. Meanwhile, house prices have surpassed their 2007 peak, rising 9.8% in the 12 months to October, although the pace has slowed.
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A lack of accommodation has been acting as a “drag” on overseas investment, and is an issue often raised by foreign multinationals, Leo Varadkar said last month, before becoming prime minister.
It’s especially challenging for those who need to hire from outside the European Union as they also need to apply for work permits, according to Clancy. Housing pressures have also resulted in more people choosing to set up businesses outside of the capital, or even in other countries altogether, he said.
Ireland has to be able to “provide the complete package” to workers coming to Ireland by making sure they have somewhere to live as well as offering them employment opportunities,” Trade Minister Simon Coveney said last week. Even so, it’s also important that foreign employees coming to Ireland on work permits are not “displacing Irish people from a housing perspective,” he added.
A record 39,995 work permits were issued by Ireland to workers from non-EEA countries last year, according to the Department of Enterprise, adding further pressure to the already strained rental market. A spokeswoman for the department said the government did not plan to limit the number of work permits that could be issued.
A cross-departmental group is currently examining how to streamline the country’s permit and visa systems.
Ireland’s accommodation challenges are “impacting on all employers” and on Irish society more broadly, Ireland’s Expenditure and Reform Minister Paschal Donohoe said in an interview on Monday. Meanwhile, the country needs workers to support an economy “that continues to perform well,” he said.
–With assistance from Morwenna Coniam.
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