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| Brexit-fuelled boom gives Dublin’s Celtic Tiger a reason to roar | Brexit-fuelled boom gives Dublin’s Celtic Tiger a reason to roar |
| (3 days later) | |
| Dublin rents have smashed every record. The number of cranes on the city’s skyline has doubled in just a year. Michelin-starred restaurants warn diners not to bother trying for a reservation until 2018. And at a giant new bar and restaurant complex in Temple Bar – immediately next door to U2’s Clarence Hotel, emblematic of Ireland’s boom years – Bono and The Edge last week partied until 6am after a sell-out gig. Is this the birth of the Celtic Tiger, mark II? | Dublin rents have smashed every record. The number of cranes on the city’s skyline has doubled in just a year. Michelin-starred restaurants warn diners not to bother trying for a reservation until 2018. And at a giant new bar and restaurant complex in Temple Bar – immediately next door to U2’s Clarence Hotel, emblematic of Ireland’s boom years – Bono and The Edge last week partied until 6am after a sell-out gig. Is this the birth of the Celtic Tiger, mark II? |
| The economic turnaround has been staggering. As recently as 2012, Ireland’s unemployment stood at 15.2%, wages had been slashed, property prices in Dublin had collapsed by 56% and the country’s economy was on an €85bn life support loan from the EU and the IMF. Today, unemployment is down to just 6.2%, with the Bank of Ireland forecasting GDP growth of 4.8% this year, after a healthy 5.1% last year. In 2017, Ireland will be Europe’s fastest-growing economy – for the fourth year in a row. | The economic turnaround has been staggering. As recently as 2012, Ireland’s unemployment stood at 15.2%, wages had been slashed, property prices in Dublin had collapsed by 56% and the country’s economy was on an €85bn life support loan from the EU and the IMF. Today, unemployment is down to just 6.2%, with the Bank of Ireland forecasting GDP growth of 4.8% this year, after a healthy 5.1% last year. In 2017, Ireland will be Europe’s fastest-growing economy – for the fourth year in a row. |
| “We’re back, lads,” said one tweet last week, with the hashtag #CelticPhoenix, and a picture of an advertisement for a trainee yacht broker. Meanwhile, listicles and tweets compete to highlight signs of excess: €17.25 for a vodka and a pint of lager in Dublin’s Shelbourne hotel; a Thai restaurant offering to deliver a doggy treat of rice pudding with mango coulis along with its red and green curries; €2.49 for an avocado in posh supermarket Donnybrook Fair; and Aer Lingus selling day trips to New York. | “We’re back, lads,” said one tweet last week, with the hashtag #CelticPhoenix, and a picture of an advertisement for a trainee yacht broker. Meanwhile, listicles and tweets compete to highlight signs of excess: €17.25 for a vodka and a pint of lager in Dublin’s Shelbourne hotel; a Thai restaurant offering to deliver a doggy treat of rice pudding with mango coulis along with its red and green curries; €2.49 for an avocado in posh supermarket Donnybrook Fair; and Aer Lingus selling day trips to New York. |
| At this week’s Galway Races, the biggest event in the Irish horse racing calendar, corporate hospitality packages sold out faster than at any time since the Celtic Tiger years (from 1995 until the financial crisis), with record prize money on offer and spending heading back to, though not yet ahead of, the boom years. | At this week’s Galway Races, the biggest event in the Irish horse racing calendar, corporate hospitality packages sold out faster than at any time since the Celtic Tiger years (from 1995 until the financial crisis), with record prize money on offer and spending heading back to, though not yet ahead of, the boom years. |
| “There is as much work as you want,” says one south Dublin electrician, who wanted to remain anonymous to avoid upsetting his clients. At the peak of the Irish construction boom in 2006 his company, which he owns jointly with his father, employed 14 other electricians. By 2012, his Dad had to let everyone go, including him. | “There is as much work as you want,” says one south Dublin electrician, who wanted to remain anonymous to avoid upsetting his clients. At the peak of the Irish construction boom in 2006 his company, which he owns jointly with his father, employed 14 other electricians. By 2012, his Dad had to let everyone go, including him. |
| “No one wanted electricians. But now I’ve got six lads working for me, and we’re flat out. It’s exactly like before. House prices are rising so fast that people are stripping out stuff just a few years old and chucking it in skips. But what about the next bust? We never seem to learn.” | “No one wanted electricians. But now I’ve got six lads working for me, and we’re flat out. It’s exactly like before. House prices are rising so fast that people are stripping out stuff just a few years old and chucking it in skips. But what about the next bust? We never seem to learn.” |
| Brexit is playing a part in an office construction boom under way across Dublin. The Irish Times keeps a monthly tally of the number of cranes visible from its office – in July there were 69, more than double the 34 when the survey began in February last year. | Brexit is playing a part in an office construction boom under way across Dublin. The Irish Times keeps a monthly tally of the number of cranes visible from its office – in July there were 69, more than double the 34 when the survey began in February last year. |
| What will be Dublin’s tallest building is rising in Capital Dock, just east of a cluster of developments that already house the flagship international headquarters of Google, Facebook and Airbnb. Banker JP Morgan will be taking much of the new space in Capital Dock, doubling its head count in the capital. | What will be Dublin’s tallest building is rising in Capital Dock, just east of a cluster of developments that already house the flagship international headquarters of Google, Facebook and Airbnb. Banker JP Morgan will be taking much of the new space in Capital Dock, doubling its head count in the capital. |
| People really want the Celtic Tiger to come back. They want their stuff back | People really want the Celtic Tiger to come back. They want their stuff back |
| But economist David McWilliams points out that commercial rents in Dublin, at €673 per square metre, are now 42% higher than in Frankfurt – and that Irish property investors must be praying for not just a hard Brexit, but a granite one. “If Brexit doesn’t drive a massive uptake in demand, we are in for a massive wobble in our inflated commercial property market,” he wrote online last week. | But economist David McWilliams points out that commercial rents in Dublin, at €673 per square metre, are now 42% higher than in Frankfurt – and that Irish property investors must be praying for not just a hard Brexit, but a granite one. “If Brexit doesn’t drive a massive uptake in demand, we are in for a massive wobble in our inflated commercial property market,” he wrote online last week. |
| Ireland’s traditional escape valve in tough times – mass emigration – reappeared with a vengeance after the crash. But many Irish people are now returning: official figures show that after seven years of net emigration, the tide turned in 2016. | Ireland’s traditional escape valve in tough times – mass emigration – reappeared with a vengeance after the crash. But many Irish people are now returning: official figures show that after seven years of net emigration, the tide turned in 2016. |
| Eoghan O’Donnell from Galway graduated in 2010 to the worst jobs market for decades. In such times, the Irish used to head to Boston and New York, but the new “generation emigration” headed for Melbourne, Sydney and Perth. | Eoghan O’Donnell from Galway graduated in 2010 to the worst jobs market for decades. In such times, the Irish used to head to Boston and New York, but the new “generation emigration” headed for Melbourne, Sydney and Perth. |
| Last November, after four years in Melbourne, Eoghan and his fiancee, Sarah, returned to Ireland. “We have only seen positives since arriving back on native soil,” he says. “The grey cloud has lifted, despite what some of the naysayers believe. Over the past few years we went from seeing businesses close to seeing new businesses open. There is a sense of hope and positivity in the country.” | Last November, after four years in Melbourne, Eoghan and his fiancee, Sarah, returned to Ireland. “We have only seen positives since arriving back on native soil,” he says. “The grey cloud has lifted, despite what some of the naysayers believe. Over the past few years we went from seeing businesses close to seeing new businesses open. There is a sense of hope and positivity in the country.” |
| His one gripe – shared by nearly all Dubliners – is the high rents demanded by landlords: “Rents in Dublin are the same as in Melbourne, but the pay is not nearly as high.” | His one gripe – shared by nearly all Dubliners – is the high rents demanded by landlords: “Rents in Dublin are the same as in Melbourne, but the pay is not nearly as high.” |
| Average monthly rent in Dublin is around £1,450, comfortably higher than London’s £1,277 average. | Average monthly rent in Dublin is around £1,450, comfortably higher than London’s £1,277 average. |
| Dublin’s acute homelessness problem rose to national prominence last December when the Home Sweet Home campaign took over a disused office block in the city centre – along with a host of Irish celebrities including singers Glen Hansard and Hozier and film-maker Jim Sheridan. They later formed a human shield to block a high court-ordered eviction. | Dublin’s acute homelessness problem rose to national prominence last December when the Home Sweet Home campaign took over a disused office block in the city centre – along with a host of Irish celebrities including singers Glen Hansard and Hozier and film-maker Jim Sheridan. They later formed a human shield to block a high court-ordered eviction. |
| In 1998, journalist Paul Howard created the wealthy rugby jock Ross O’Carroll-Kelly, with a satirical column in the Irish Times and books including the pre-crash Guide to (South) Dublin: How to get by on, like, €10,000 a day, and the post-crash Downturn Abbey. | In 1998, journalist Paul Howard created the wealthy rugby jock Ross O’Carroll-Kelly, with a satirical column in the Irish Times and books including the pre-crash Guide to (South) Dublin: How to get by on, like, €10,000 a day, and the post-crash Downturn Abbey. |
| Howard is sceptical about the phoenix economy: “I started off lampooning rugby, but turned it into a weekly social commentary to vent my spleen about the new Ireland, which I found very vulgar. | Howard is sceptical about the phoenix economy: “I started off lampooning rugby, but turned it into a weekly social commentary to vent my spleen about the new Ireland, which I found very vulgar. |
| “The boom was the first real prosperity we ever had. But it wasn’t real; it was based on people selling houses to each other. I still meet taxi drivers today who bought three houses in the boom. They are still living in financial limbo. | “The boom was the first real prosperity we ever had. But it wasn’t real; it was based on people selling houses to each other. I still meet taxi drivers today who bought three houses in the boom. They are still living in financial limbo. |
| “My dad was a factory worker. Lots of his friends started buying multiple properties. Every town in Ireland has probably 20 local people with serious levels of debt they will never get out of after buying in 2006/07 at the top of the market. They were buying plots of land outside Dublin that were suddenly worthless after the crash. But we still believe in all the things we believed in 10-15 years ago ... I have a sense that people really want the Celtic Tiger to come back. They want their stuff back. | “My dad was a factory worker. Lots of his friends started buying multiple properties. Every town in Ireland has probably 20 local people with serious levels of debt they will never get out of after buying in 2006/07 at the top of the market. They were buying plots of land outside Dublin that were suddenly worthless after the crash. But we still believe in all the things we believed in 10-15 years ago ... I have a sense that people really want the Celtic Tiger to come back. They want their stuff back. |
| “I remember, during the Celtic Tiger, the bane of my life was going into a bank to pay the electricity bill. You just couldn’t get in and out without a sales spiel from some 24-year-old: ‘I see you have savings. What are your financial plans?’ I’d say that my plan was for him to put it in the safe and have it there for when I want to come and get it. But he would say ‘the money’s not working for you’. Unfortunately, we still believe in that nonsense.” | “I remember, during the Celtic Tiger, the bane of my life was going into a bank to pay the electricity bill. You just couldn’t get in and out without a sales spiel from some 24-year-old: ‘I see you have savings. What are your financial plans?’ I’d say that my plan was for him to put it in the safe and have it there for when I want to come and get it. But he would say ‘the money’s not working for you’. Unfortunately, we still believe in that nonsense.” |
| Drive 120 miles north-west from Dublin and you swap the capital’s boom for rural bust in Ballaghaderreen, County Roscommon. In landlocked counties such as this and neighbouring Longford, residents scoff at suggestions of a new Celtic Tiger. | Drive 120 miles north-west from Dublin and you swap the capital’s boom for rural bust in Ballaghaderreen, County Roscommon. In landlocked counties such as this and neighbouring Longford, residents scoff at suggestions of a new Celtic Tiger. |
| Hardware shop owner and local councillor Michael Mulligan says: “Nothing has changed in the past five or six years. Ballaghaderreen is a fine town and I’m proud of it, but the unemployment is chronic. My takings are still 50% down from the boom years, and I’ve had to let people go. | Hardware shop owner and local councillor Michael Mulligan says: “Nothing has changed in the past five or six years. Ballaghaderreen is a fine town and I’m proud of it, but the unemployment is chronic. My takings are still 50% down from the boom years, and I’ve had to let people go. |
| “There are around 150 vacant houses and 30-40 big industrial units lying empty. We’re like a thorn in the side of the success that the Dublin government talks about. If you look around for young people here, they’ve nearly all gone, to Dublin, London or Australia. It’s hard even to put together a football team.” | “There are around 150 vacant houses and 30-40 big industrial units lying empty. We’re like a thorn in the side of the success that the Dublin government talks about. If you look around for young people here, they’ve nearly all gone, to Dublin, London or Australia. It’s hard even to put together a football team.” |
| Ballaghaderreen has the lowest property prices in Ireland, with the average house valued at €58,000, compared with €548,000 in South County Dublin. | Ballaghaderreen has the lowest property prices in Ireland, with the average house valued at €58,000, compared with €548,000 in South County Dublin. |
| The economic gloom in rural Ireland is widely attributed to governing party Fine Gael’s general election failure in 2016. Taoiseach Enda Kenny campaigned around the slogan “Let’s keep the recovery going”, but many voters responded, “What recovery?” | The economic gloom in rural Ireland is widely attributed to governing party Fine Gael’s general election failure in 2016. Taoiseach Enda Kenny campaigned around the slogan “Let’s keep the recovery going”, but many voters responded, “What recovery?” |
| Economists insist, however, that the Irish recovery is now broader and deeper than just Dublin. Loretta O’Sullivan at Bank of Ireland says jobs growth is the key indicator. Ireland is creating about 1,000 new jobs a week, three-quarters of them outside the capital. “The important distinction between now and the Tiger period,” she says, “is this is not a credit-fuelled boom. Credit growth in Ireland is still quite muted. What we are seeing is job gains, plus some income growth and low inflation.” | Economists insist, however, that the Irish recovery is now broader and deeper than just Dublin. Loretta O’Sullivan at Bank of Ireland says jobs growth is the key indicator. Ireland is creating about 1,000 new jobs a week, three-quarters of them outside the capital. “The important distinction between now and the Tiger period,” she says, “is this is not a credit-fuelled boom. Credit growth in Ireland is still quite muted. What we are seeing is job gains, plus some income growth and low inflation.” |