Soaring rents see Ireland’s capital overtake Paris and Milan in the cost-of-living stakes.
Rising rents and an ill-judged return to the property bubble have made Dublin the most expensive city in the eurozone to live for expatriates, a situation that could ultimately damage the city’s rising digital tide.
In recent weeks, we reported how the accommodation crisis risks turning Dublin into a European version of San Francisco, where few other than highly paid tech workers can afford to live.
‘Dublin has now overtaken Paris to become the most expensive city in the eurozone’
– NOEL O’CONNOR
Today (26 June), a report from Mercer ranked Dublin as the highest in the eurozone for the cost of living.
According to the 2018 survey, Dublin has moved up 34 places in the global rankings from 66th to 32nd position to claim the top eurozone spot from Paris. In the UK, London ranks 19th, Birmingham 128th, Aberdeen 134th, Glasgow 148th and Belfast 152nd.
Multinationals are focusing on tracking where mobile talent goes as the digital era, ageing populations, skill shortages, and an unpredictable political and economic environment take their toll.
According to Mercer’s 24th annual Cost of Living survey, factors such as instability of housing markets, low inflation, and fluctuating prices for goods and services are impacting the cost of doing business in various cities around the world.
Mercer’s survey reveals that Hong Kong has taken the top spot as the world’s most expensive city for expats both in Asia and globally as a consequence of Luanda’s drop in the ranking, due in part to the downward trend in the city’s housing market.
Tokyo and Zurich are in second and third positions, respectively, with Singapore in fourth, up one place from last year, and Seoul in fifth. This means that four out of five of the world’s most expensive cities for expatriates are now in Asia.
“Whilst all cities in the eurozone have risen in the rankings due to the euro strength against the US dollar, Dublin has now overtaken Paris to become the most expensive city in the eurozone in terms of cost of living for expatriate workers,” said Noel O’Connor, senior consultant at Mercer.
“The survey identifies cost pressures on expatriate rental accommodation in Dublin as the key driver of this, and this in turn reflects the growth of the economy with continuing high levels of foreign direct investment.”
Others appearing in the top 10 of Mercer’s costliest cities for expatriates are: Luanda (6), Shanghai (7), N’Djamena (8), Beijing (9) and Bern (10). The world’s least expensive cities for expatriates are Tashkent (209), Tunis (208) and Bishkek (207).
The writing is on the wall
As Dublin’s accommodation crisis spirals, the writing has been on the wall for some time and it could eventually hurt the city’s attractiveness for future investment.
But the investments are still flowing in. Last week, Amazon announced 1,000 jobs for Ireland as it opened a new building in Dublin 4. Meanwhile, Facebook is pressing ahead with plans for a campus in Dublin 4 and is building two new data centres while Google has bought an entire quayside in Silicon Docks as it continues to grow.
And investors are noticing the impact of skyrocketing rents.
“With technology advances and the importance of a globally connected workforce, deploying talent remains a key component of a multinational’s business strategy,” said Ilya Bonic, president of Mercer’s career business.
“While a mobile workforce allows organisations to achieve greater efficiency, utilise top talent and be cost-effective with international projects, volatile markets and slowing economic growth in many parts of the world require them to carefully assess expatriate remuneration packages.”
We have previously warned that the accommodation crisis is harming Dublin’s perception as a go-to place for overseas talent and indicated that some are already choosing jobs elsewhere because it is too hard to find suitable accommodation.
Last August, a study by digital recruitment firm Prosperity showed that 40pc of people it helped to hire for tech employers in Dublin came from overseas. In 2016 and preceding years, the recruiter had a rejection rate of approximately 15pc on job offers to candidates living abroad but by the third quarter of 2017, that had doubled to nearly 30pc.
The Docklands Residential Report 2018 published by the Owen Reilly agency, which assists Dublin tech companies with lettings for employees, revealed that almost half of the renters in the desirable Silicon Docks area of Dublin are tech workers. In fact, 92pc of people who live in that area are from overseas.