Median disposable wages have increased by almost 8% since 2012 whilst the most recent reports by daft.ie show an almost 60% rise in average rents across the country and a 40% rise in asking prices for residential properties in the same period. The biggest rises have been in Dublin, followed by Cork and Galway.
This growth in housing costs has a strong intergenerational component as well as implications for the demand for other goods aside from housing; thus such price rises have distributional implications, benefitting some sections of society and sectors of the economy at the expense of others.
While a baseline for wage increases based on inflation and productivity is projected at somewhere in the region of 3% in Ireland annually over the next few years (McDonnell 2016), in the context of the current housing crisis upward pressure on wages is likely to materialize. This is particularly the case in certain geographical areas to prevent a deterioration in the current living standard of Irish workers.