As we learn that the rate of inflation in the UK is twice that of other western countries, it’s time to ask whether the cost of living in Ireland has gone down at all since the recession there. After all, Ireland uses the euro, a currency that’s being hit hard because of Greece, it has fallen out of favour with a lot of international companies, and demand for commercial property has fallen off…
So, is it now cheaper to live in Ireland than the UK, is it a nation worth considering if you want to expatriate but you don’t want to go too far from home, or is it too dogged with high inflation and an expensive cost of living?
In relative terms the cost of living in Ireland’s main and most popular city of Dublin was massive in recent years, and it made it hard to find common ground in terms of evaluating what it would cost someone relocating to the emerald isle because elsewhere in the country the cost of living was far, far cheaper…so it’s time to revisit and see what’s changed.
According to the latest findings from the Organisation for Economic-Co-operation and Development (OECD), which measured inflation across 30 major economies, the likes of Mexico, Iceland, Hungary, Greece, Turkey and the UK are suffering from very high rates of inflation at the moment. For us that translates to higher prices that we have to pay for everything from food to fuel. However, when it comes specifically to food, the OECD reports that in Ireland the average cost has fallen by almost 8%…which suggests that the cost of living in Ireland may also have reduced quite significantly for the average household.
Food is of course a massive monthly bill for many families, and if you’re on a budget it’s good to know that your budget will now stretch further in Ireland than it did just one year ago. But the other major commodities and outgoings that are essential to budget for are fuel – in terms of heating and lighting your home – and the cost of affording your property. So how does Ireland do on these fronts?
Well, again according to the OECD unfortunately the rate of inflation on essential fuel has gone up by a whopping 9.1%. Now, when you factor in that this rise has come on top of a recession when people are losing their jobs or facing wage increase freezes across Ireland, it’s suggestive of the fact that actually, in real terms, the cost of living in Ireland could be getting harder to cope with. So what about affording housing? After all, if you’re thinking of living in Ireland you need to know what your money can buy you.
Just like in the UK, the property bubble in Ireland has well and truly burst – it’s burst because of affordability issues, because of the banks’ reluctance to lend and because people just do not feel financially secure enough to consider stretching their budgets. The economy in Ireland has shrunk by 12.5% and unemployment has climbed to 13.4% so there is just no appetite for property. This means that there are bargains to be bought at auction, but there is very little movement making it hard to find easy to afford easy to buy homes.
Now if you factor in the issue of the pound remaining weakened against the euro despite the upset in the eurozone caused mainly by Greece, that means that it is expensive for a Briton to buy a property in Ireland anyway. The only good thing we can say is that there has been a massive decline in intensity of demand for accommodation in Dublin which has seen it fall 9 places in its ranking as one of the most expensive cities in the world in which to live, and it is currently ranking around about 25th in the world according to the World Cost of Living Index.
So, is Ireland an affordable place to live? No more or less so than it was. Ireland is really struggling thanks to its piles of toxic debts and the economic landscape is certainly not a reason to consider moving to live in Ireland. If on the other hand you want to live in a stunning nation that has a passionate heart and an almost magical soul, Ireland could be worth a second look – just don’t go there under the misapprehension that it is cheap!