The average industrial wage was earnings per worker, while household income might be higher, he pointed out, due to female labour-force participation.
This scale rose in the mid-1990s to six times’ average wages, he added.
Current buyers were now subject to stricter lending terms, post-2006, but from 1970 up to 1995 prices were relatively stable, he said.
Interest rates were up to 12% in the past, however, making a very significant change in monthly payments, Coffey added.
Mortgage interest rates peaked in the early 1980s and were now still at historically low levels, he said.
Thus, while house prices were lower in the past, mortgage payments made by households were often up to 60% of income, he said.
Incomes were also higher now than they were in the 1970s and 1980s, he said, and the highest mortgage repayments were in the early 1980s.
Affordability
However, rental affordability and access to the mortgage market was the current-day problem, he said.
“Can we actually get the mortgage? Can we actually get a property to purchase? Can we meet the Central Bank’s rules? That seems to be where a lot of the squeeze is,” he commented.
A 10% mortgage deposit from 1970 to 1995 would have averaged around 26% of annual household income, whereas now it stood at almost 50%, he added.
Getting over the threshold to benefit from lower interest rates was much more difficult now for buyers, he pointed out, with many turning to parental help.
"So perhaps it was easier to start in in the 1970s, ‘80s and ‘90s, because of the impact of the 10% deposit, and the much stricter approach to lending,” he said.
Notwithstanding that, a significant number of transactions were still happening, with CSO figures of 400 first-time buyers each week – a strong upward trajectory with a brief interruption a decade ago.
“There are significant numbers of people purchasing homes for the first time, but that's not to say that our housing crisis isn’t a crisis,” he said pointing to greater numbers of young adults living at home with their parents in Ireland, matching rates in countries such as Greece, Portugal, Italy, and Spain that indicated a mismatch in supply and demand.
Surge in corporation tax
The contribution of US multi-nationals the Irish economy was huge, Coffey said.
The contribution of US multi-nationals to the Irish economy was huge, Coffey said. The surge in corporation tax has reached unprecedented levels domestically, to close on €5,000 per capita.
Taxes have traditionally been seen as out of people’s pockets, “but corporation tax is coming from someone else’s pockets”, he said.
Coffey described this as a huge injection into the Irish economy, the second highest multinational tax receipt in the world, and significantly higher than the take in larger countries, such as Germany, the Netherlands and France.
US multi-nationals had more assets in Ireland than in any other EU country by value, he said – including pharmaceutical plants, computer-chip plants, and medical-devices facilities.
“We have employees doing very high-value activity,” he said.
Multi-national tax was the crest of a wave and a huge flow to the country, he concluded.
Coffey said that Ireland had moved from being historically a labour-surplus economy, with outward migration, to a labour-shortage economy with people trying to move here.
If workers could not find affordable places to live, that would limit the workers we could attract, he added, and their attendant skillsets.
More companies would likely try to provide worker housing themselves, such as Ryanair, he said.
The economist stated that Ireland was currently facing physical restraints to growth, where our problem, historically, was financial-based.
“We didn't have the money – now we have lots of money, but we need to actually figure out how to use it,” Seamus Coffey concluded.