North America is home to a generation of people who have never experienced a recession in their adult lifetime. They’re between 20 and 30, much like myself.
I remember when I was very young, my dad being laid off from construction during the recession which hit in 1984. He’s mentioned it before, but he was unemployed for the better part of 2 years. I’ve had long conversations with him and my grandfather about what it was like to live, work and buy real estate through the cycles of boom, bust and recession.
What occurs to me when I meet young people interested in real estate and business in general is there’s a feeling of invincibility. I noticed it when I was still in Canada, but after spending a fruitless four months trying to find a job in Ireland, I have a new appreciation for the situation.
There’s a number of people who I’ve talked to about the economy who (in a typically Irish fashion, but that’s another topic) are both fairly realistic and nearly without hope. As one landlord said to me:
We (Ireland) gorged like pigs at the trough and now we’re paying the price for it…It’s going to be a decade before things get back to something like normal.”
I also met with several people involved with real estate, investing and the financial services industry. One head of an Irish investment fund, which is more active in the UK and Germany than Ireland described the government as bankrupt. Really, it’s not that far from the truth. It’s a financial situation similar to the US, but with fewer options for creating revenue.
I met young people, lawyers, engineers, scientists, business men and women, many with Masters’ degrees, all looking for work. Easily half of the young professionals I spoke with were actively researching work options in Canada, the US or Australia. It’s just shocking how many people, highly qualified, are totally out of work. It’s just strange to me how many tradespeople are out of work, when I think of the severe shortages we saw in Alberta.
The current Irish government just released a budget that makes some significant cuts, but doesn’t seem to create enough growth or movement to help bring the economy forwards. Their property bailout, NAMA (the National Asset Management Act) will be buying assets at 10-20% above current market value and will either be a great success if it stays the course, or be a huge waste of money and warp the property market for years to come. It’s also the only choice, even if it’s not perfect.
What several people have said is this is a more severe problem than any post-WWII recession in Ireland. I think that combined with the economic changes of the 21st Century and membership in the EU, this time will come to be as significant as the Great Famine or the Revolution of 1912.
It’s been an interesting time to be in Ireland, and it’s given me a lot more perspective on economies and the future.