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Brexit is set to widen the housing costs gap between Dublin and rural Ireland, economists have predicted.<\/p>\nBrexit is set to widen the housing costs gap between Dublin and rural Ireland, economists have predicted.<\/p>\n
The economic fall-out will likely see income levels drop and unemployment rise in Ireland \u2013 factors that would dampen property price growth, experts from the Economic and Social Research Institute (ESRI) the told an Oireachtas committee.<\/p>\n
But ESRI\u2019s head of economics Professor Kieran McQuinn highlighted that while housing demand may drop elsewhere in the country, other Brexit consequences could see it rise in the capital city.<\/p>\n
Giving evidence to the joint committee on Housing, Planning and Local Government, Mr McQuinn pointed to the number of financial workers that could relocate to Dublin if London\u2019s banking sector was hit.<\/p>\n
\u201cThe impact of Brexit on income levels and the labor market is fairly unambiguous \u2013 both are expected to be lower than a no Brexit scenario,\u201d he told committee members.<\/p>\n
\u201cIn this respect housing demand is likely to be lower due to both factors.\u201d<\/p>\n
One could see significant regional differences in the impact of Brexit on the Irish housing market<\/p>\n
Professor McQuinn added: \u201cBut Brexit could result in large numbers of people moving to Ireland from the UK, particularly if there is significant fall-out for the financial sector in London.<\/p>\n
\u201cThis could see an increase in the number of people coming to live and work, particularly in Dublin, which would increase housing demand.<\/p>\n
\u201cTherefore one could see significant regional differences in the impact of Brexit on the Irish housing market.<\/p>\n
\u201cThe rest of country might be more adversely impacted while the greater Dublin area less so.\u201d<\/p>\n
The senior economist said supply of new homes could also be hit by Brexit \u2013 citing likely cost increases in securing labor and materials from the UK and potential difficulties accessing finance in a turbulent economic climate.<\/p>\n
He said the supply of homes for lower income families could be particularly impacted.<\/p>\n
\u201cIf Brexit were to result in a lower level of housing provided by the private sector it is important that the State continues to invest in affordable and social housing,\u201d said Professor McQuinn.<\/p>\n
He also predicted if disposable income falls post-Brexit more people will need to seek state assistance with housing costs.<\/p>\n
Dr Tom Healy, the director at the Nevin Economic Research Institute, also gave evidence to the committee on Tuesday.<\/p>\n
He said the potential impact of relocating London financial workers should not be overestimated.<\/p>\n
Dr Healy said a potentially more significant factor would be the fact people in continental Europe who intended to move to the UK to find work might instead choose Ireland post-Brexit.<\/p>\n
\u201cThey are more likely now, others things being equal, to move to the Republic of Ireland,\u201d he said.<\/p>\n