Ireland is hostage to Rich Daddy Syndrome

A particular type of student prowled the campus in my college days. We referred to them as victims of Rich Daddy Syndrome (in the 1990s, there were fewer independently Rich Mammies.) They weren’t actually victims at all: their symptoms included ski holidays, a Brown Thomas loyalty card and an air of being untroubled by concerns like where the £72.50 for that week’s rent would come from. They knew not just how to pronounce Gili Lankanfushi, but which specific villa in the luxury Maldives resort to request when they booked.

They were the fortunate minority for whom everything seemed to fall effortlessly into place: they attended the right school and played the right sports to ensure they had the right contacts which would eventually lead to the right job and allow them to buy a house in the right postcode from where they would send their children to the right school wearing the right brand of rain jacket. Rinse and repeat. Nobody ever spelled this wheeze out, but everyone knew how it worked.

Wealth in this country has always operated like a giant pyramid scheme: you had to come from it to have any hope of achieving it. But at least when I entered adulthood, you didn’t have to be in the scheme to tick off the basic stages of adult life: go to college, rent a flat, move in with a partner, buy a house, have children, educate them, start a pension. Just by virtue of being born at the right time, you had every chance of being, if not actually wealthy, then certainly better off than your parents or grandparents.

Now, that situation has reversed. Unless you come from the Rich Daddy set, you’re shut out of those markers of adulthood. Even a modestly comfortable life is increasingly out of reach.

We shouldn’t import broken British rhetoric about migration

---

What’s the right age for my daughter to get a smartphone? I asked her older siblings

---

We’re heading towards AI prices, where diners can be charged more because algorithms say they can afford it

---

‘No bull, no spin’: The problem with a Taoiseach who is extremely online

---

... your chance of getting on the property ladder is largely a factor of whether your parents can afford to gift you a chunk of the deposit, which averages €52,000 according to the Banking and Payments Federation Ireland

One indicator of this is that the median age of a homebuyer has climbed to an astonishing 39, up from 35 in 2010. In 2005, about 84 per cent of first-time buyers were younger than 34.

Small wonder when, in order to get a mortgage now, you’re expected to provide proof of income, evidence of savings, and have 10 per cent of the loan value in your back pocket. Some banks even want a poke around in your pension pot. In effect, this means that your chance of getting on the property ladder is largely a factor of whether your parents can afford to gift you a chunk of the deposit, which averages €52,000 according to the Banking and Payments Federation Ireland. A survey it conducted in 2021 found that nearly 42 per cent of first-time buyers relied on someone else – we can assume the unspoken part here is ‘their parents’ – to cover part of their deposit, as did one in four of those moving house. In all, a whopping €210 million was stuffed into cards signed “Love Mum and Dad” that year.

[ First-time homebuyers are older and earning more than ever - report ]

This kind of good fortune isn’t confined to urban dwellers. Writing in these pages recently, Lorcan Sirr and Mel Reynolds pointed out that almost 40 per cent of those drawing down a mortgage for the first time in 2022 “were self-builders, mostly rural, often building on their own land”. The help-to-buy scheme was extended to self-builders, so those embarking on their adult lives with a site also got a nice dig-out from the rest of us.

That’s not where the unfairness ends. If you do manage to get on the housing ladder, it’s your golden ticket to the pyramid scheme. Housing is still the main way Irish people accumulate wealth. Consider these figures: in 2020, the median wealth of an Irish homeowner was nearly €304,000, according to the CSO. For renters it was €5,300. Or how about these: the richest households have total gross wealth of €1,821,000 – one third of which is the family home; one fifth is from other assets. The average gross wealth of the poorest households is just under €30,000.

For the 30 per cent who don’t belong to the home-owning class, there is a looming retiree housing crisis, which will see a generation retire with no secure home and little pension income

Eventually, of course, this pyramid scheme is liable to collapse. A buyer aged 39 who takes out a 25 year mortgage will be paying it off almost until retirement – so not a lot of scope for putting together a €50,000 deposit for each one of their children’s homes. Inherited wealth isn’t going to help, since their own parents probably already remortgaged.

For the 30 per cent who don’t belong to the homeowning class, there is a looming retiree housing crisis, which will see a generation retire with no secure home and little pension income.

Inequality is widening in other ways. The annual feeder schools tables, which came out this week, are a reminder of the murky relationship between money and education. Students from fee-paying schools made up 7.3 per cent of Leaving Cert students, but secured 9 per cent of total third level places and 12.7 per cent in traditional universities. Deis schools students made up 17.9 per cent and 17.4 per cent of all places, but just 10 per cent in traditional universities. These figures are an improvement on previous years, but they don’t tell the full story, because there is now a new demographic of squeezed middle-class students – academically able, but not wealthy enough to afford student rents, not disadvantaged enough to qualify for help. A poll of 40,000 third-level students found one third had seriously considered quitting because of financial or personal pressures.

We all know how the system works. It’s just a bigger version of the Fianna Fáil tent at the Galway Races. Everyone complains about it until they get inside, then they’re busy zipping up the sides to make sure no one else has access. Who really runs Ireland? The same people who always have: Rich Daddies and Mummies, and their children.