Dr. Tom McDonnell:

Obviously, in the Republic of Ireland, the situation is quite different, and qualitatively so. There has been a housing failure, of various forms, for about a quarter of a century now, from boom to bust. We are still recovering from that bust. The problems in the private rental sector are long-standing, with rents having greatly outstripped wage growth over the last decade. This situation obviously impacts standards of living and disposable incomes. The housing failure, or housing crisis, in the Republic of Ireland now is a significant constraint in terms of the ability to attract workers from abroad. This obviously has implications for investment.

When companies invest in the Republic of Ireland, they often do so knowing the workers they will require are not available and it will be necessary to attract migrants from outside the country. These companies are coming here for various reasons to do with tax or whatever it might be. There are no places for workers to live in the greater Dublin area now, and this is making investment all the more challenging. Housing, therefore, will be a big constraint on our ability to grow the economy over the next five or six years, particularly in the greater Dublin area.

Again, we see this aspect as being a part of industrial policy. We talked earlier about the various qualifications that workers have in the Republic of Ireland being the issue, whereas in the North it may be more systemic. The construction sector is one specific context in the South which is a problem. The issue of overqualification or misqualification of workers in the South is becoming a problem now. We know the world is moving away from globalisation. In fact, foreign direct investment may become a slower trickle in any event globally over the next decade or two compared to what it was from the 1990s. This development would have implications for the North and the Republic. If the Republic, however, does not even have places for workers to live, it is not going to be able to attract foreign direct investment at the same level as before.