This is a re-blog of an article I wrote in January 2010, when we were not fully aware of the depths of the economic crisis facing the country! To answer the question, ‘Yes the boom is actually costing us money!’
“Two newspaper articles this week report on the fall out from the property boom and investment madness that gripped Ireland. Firstly in today’s Irish Independent there’s a report stating that 300,000 homes lie empty around the country. The figure was calculated by the National Institute of Regional and Spatial Analysis (Nirsa), based at NUI Maynooth.
Then in yesterday’s Irish Times, we read about the sharp increase in the number of people seeking help from the Money and Budgeting Services Offices (MABS). The MABS 2009 report gives a breakdown of who used their services last year, and in 2009 the newest category of clients were most noticeably people who have invested heavily in ‘buy to let’ properties and who cannot meet these mortgage repayments.
Reading both these articles and the obvious cause and effect outlined in the reports, could we eventually discover that rather than making us better off in the long term, the boom years might actually cost us money? An interesting study I believe would be a cost benefit analysis of the property boom to the Irish taxpayer.
To calculate the human and national cost to the exchequer, the study should look at the cost of personal debt, construction industry related unemployment, un-paid development levys, social welfare supports for mortgage repayments, bank bail-out schemes…..and so on. Then study what strategic investments were made during our boom, such as water, public transport, education, health. In other words investments that give long term benefit to sociey as a whole.
I wonder would we find that the boom indeed was ‘boomier’ as Bertie Ahern predicted, but in ways that the Irish taxpayer did not expect.