WHY is Ireland so expensive??

Cato78 · 08-04-2010 12:51AM #1

Hi all,

I'm an American who has posted here a few times, as my girlfriend and I are planning a move to Europe and have been considering Ireland. Though the more and more we explored the idea, the more we started looking at other places in Europe. We love the Irish people, culture, landscape, etc. But of course the economic situation is quite depressing. Let's ignore the unemployment rate for a moment and focus on why prices in general are so damned high? I've read many posts online and talked to some friends in Ireland, but nobody seems to have an answer. I'm no economist and quite frankly am only educated in American politics. From what I've read and heard, the Irish pay more for food, electronics, dining out, car insurance, etc. Though I do understand that prices have fallen a fair bit over the last year or so. Also, the housing prices seem to be pretty decent nowadays. They're certainly much better than what we've found in the Netherlands, which is another country we're considering.

Perhaps there's no concrete answer to the question, but I'd love to hear some opinions. I'm sure the scale of the economy has something to do with it, but surely that can't account for some of the prices I've seen.

Dr_Phil · 08-04-2010 01:06AM

Cato78 wrote: »

From what I've read and heard, the Irish pay more for food, electronics, dining out, car insurance, etc.

Pay more than who? Did you compare expenses/incomes ratio? How many % of an average salary is this "overpriced" dinner in Ireland and how much would be somewhere else? Maybe it'll shed some light...

EDIT: Don't forget about free water and tax reliefs and supplements... But if you're just about comparing price of fags here and in France then good luck.

hinault · 08-04-2010 01:20AM

Cato78 wrote: »

Hi all,

I'm an American who has posted here a few times, as my girlfriend and I are planning a move to Europe and have been considering Ireland. Though the more and more we explored the idea, the more we started looking at other places in Europe. We love the Irish people, culture, landscape, etc. But of course the economic situation is quite depressing. Let's ignore the unemployment rate for a moment and focus on why prices in general are so damned high? I've read many posts online and talked to some friends in Ireland, but nobody seems to have an answer. I'm no economist and quite frankly am only educated in American politics. From what I've read and heard, the Irish pay more for food, electronics, dining out, car insurance, etc. Though I do understand that prices have fallen a fair bit over the last year or so. Also, the housing prices seem to be pretty decent nowadays. They're certainly much better than what we've found in the Netherlands, which is another country we're considering.

Perhaps there's no concrete answer to the question, but I'd love to hear some opinions. I'm sure the scale of the economy has something to do with it, but surely that can't account for some of the prices I've seen.

This country is expensive.

We're an island, so it costs money to get product in and out of this country in terms of transport costs.
(for example, flights costs for every aircraft landing/taking off, when I worked in the industry back in 1999 were € 800.00 per flight).
When you include customs and excise duty tax on product at point of entry, you can see that costs quickly add up and that is BEFORE one has to factor other costs such as wages/rent/utility costs/V.A.T.

Other costs like electricity costs, for example, are high because there is currently a virtual monopoly on the supply of electricity in this country, so that explains that.

Costs for services here are higher, far higher than other European nations.
Why do teachers, most of whom are paid out of tax revenues, earn more here than in the U.K?
I don't know.
And you can apply that across all of the professions.
Why are hospital consultants paid €250k per annum when they're paid €100k in France?

There is something inherently wrong with a nation when services, across most professions in this country, are far more expensive than in other countries.

To answer your question, I can see how/why a product would be more expensive in the shops here.
I can see why utility costs are expensive (because there is a monoply).

The cost of services though is the one that gets me.
Our service costs are too high - but I do not know the reason for this.

donkey balls · 08-04-2010 01:37AM

the regulater for energy sets down the costs to the ESB(which has them sell it at a more expensive price to the customers than say bord gais).
other things like mobile phone charges the companies use the usual quote(Ireland is an island with a small population compared to the UK).
the likes of grocery&clothing from the two large retail chains here should be a lot less but is not due them gouging us over the years even though they stream lined their suppy chain.

Cato78 · 08-04-2010 01:48AM

hinault wrote: »

This country is expensive.

We're an island, so it costs money to get product in and out of this country in terms of transport costs.
(for example, flights costs for every aircraft landing/taking off, when I worked in the industry back in 1999 were € 800.00 per flight).
When you include customs and excise duty tax on product at point of entry, you can see that costs quickly add up and that is BEFORE one has to factor other costs such as wages/rent/utility costs/V.A.T.

Other costs like electricity costs, for example, are high because there is currently a virtual monopoly on the supply of electricity in this country, so that explains that.

Costs for services here are higher, far higher than other European nations.
Why do teachers, most of whom are paid out of tax revenues, earn more here than in the U.K?
I don't know.
And you can apply that across all of the professions.
Why are hospital consultants paid €250k per annum when they're paid €100k in France?

There is something inherently wrong with a nation when services, across most professions in this country, are far more expensive than in other countries.

To answer your question, I can see how/why a product would be more expensive in the shops here.
I can see why utility costs are expensive (because there is a monoply).

The cost of services though is the one that gets me.
Our service costs are too high - but I do not know the reason for this.

How much would you say prices have fallen since the recession hit?

Cato78 · 08-04-2010 01:54AM

donkey balls wrote: »

the regulater for energy sets down the costs to the ESB(which has them sell it at a more expensive price to the customers than say bord gais).
other things like mobile phone charges the companies use the usual quote(Ireland is an island with a small population compared to the UK).
the likes of grocery&clothing from the two large retail chains here should be a lot less but is not due them gouging us over the years even though they stream lined their suppy chain.

Interesting. So do you think a lot of it is companies simply charging whatever they felt they could get? Perhaps with the rapid rise of salaries, companies just aimed for the sky and low and behold people paid those prices. I was really astonished at some of the food prices I saw. We'd have riots on the streets here if things went that high. Someone gave me the price for a delivery pizza and I think it was four times what we pay here. How can that be? Are they paying 4 times as much for the ingredients? Is the Pizza Hut there making 4 times the profit?

donkey balls · 08-04-2010 01:58AM

Cato78 wrote: »

How much would you say prices have fallen since the recession hit?

house prices have fell a good bit but in general the likes of utilities have not(broadband,gas electricty,telecoms)some grocery prices have come down in price only to see them go back up in price:rolleyes:a few weeks later.
the likes of house/car insurance has risen&motor tax.

i spent some time over in FL training and we used to order a pizza online and have it delivered to the house for 15usd also did the the grocery shopping in the local wallies for next to nothing, people say that FL is one of the cheapest states to live in the USA.

as for the companies rubbing it in here they all did it but people would not complain most of them got taken away with this celtic tiger crap that we are paying for now.

Cato78 · 08-04-2010 02:08AM

donkey balls wrote: »

house prices have fell a good bit but in general the likes of utilities have not(broadband,gas electricty,telecoms)some grocery prices have come down in price only to see them go back up in price:rolleyes:a few weeks later.
the likes of house/car insurance has risen&motor tax

We've had the same housing issue here, as most probably know. My house was once valued at about $500,000USD, now it's closer to $300,000USD. Fortunately, we own the home. Some people view the fall as a bad thing, but in reality, this house should never have been worth $500,000.

Food prices have gone up again? I wasn't aware. That's a shame. How do you increase food prices when unemployment is rising and salaries are being slashed?? I just don't get it.

Cato78 · 08-04-2010 02:12AM

donkey balls wrote: »

house prices have fell a good bit but in general the likes of utilities have not(broadband,gas electricty,telecoms)some grocery prices have come down in price only to see them go back up in price:rolleyes:a few weeks later.
the likes of house/car insurance has risen&motor tax.

i spent some time over in FL training and we used to order a pizza online and have it delivered to the house for 15usd also did the the grocery shopping in the local wallies for next to nothing, people say that FL is one of the cheapest states to live in the USA.

as for the companies rubbing it in here they all did it but people would not complain most of them got taken away with this celtic tiger crap that we are paying for now.

Small world. What part of FL? I'm just outside Orlando, about 45mins away from Disney. I do most of my shopping at WalMart as well. Though I go to the smaller stores for meat, as the quality of meat at Wallies is crap. I accept that food prices are going to be higher anywhere in Europe, but the Irish really do seem to be taken for a ride. I'm sure there must be some economic explanation for it.....I just don't know what it is.

donkey balls · 08-04-2010 02:28AM

i stayed at daytona&ormond for my sins:Das for the irish being taken for a ride it has be going on for years,im sure a few of the guys will be along with a list the lenght of their arms.

all though this one has stuck with me a well known Irish retailer shipped their dry goods&draperyproducts into Ireland via a CDC in Dublin these goods would then be dispatched throughout the UK&Spain.
While i was in one of these stores in the UK the goods was half the price compared to Ireland.
now you got to factor in transport costs of these goods by road/ferry(drivers wage/diesel)and they are still cheaper than Dublin,yet the company stated that the reason for the high cost here was the transport costs.:rolleyes:pull the other one it has bells.

Cato78 · 08-04-2010 02:51AM

donkey balls wrote: »

i stayed at daytona&ormond for my sins:Das for the irish being taken for a ride it has be going on for years,im sure a few of the guys will be along with a list the lenght of their arms.

all though this one has stuck with me a well known Irish retailer shipped their dry goods&draperyproducts into Ireland via a CDC in Dublin these goods would then be dispatched throughout the UK&Spain.
While i was in one of these stores in the UK the goods was half the price compared to Ireland.
now you got to factor in transport costs of these goods by road/ferry(drivers wage/diesel)and they are still cheaper than Dublin,yet the company stated that the reason for the high cost here was the transport costs.:rolleyes:pull the other one it has bells.

Ah, I'm halfway between Daytona and Orlando, in a little city called Deltona. I spent many a day in my teens at Daytona Beach. As you know, the heat here in the summer is so insane that you must actually be submerged in water to withstand it.

That's an insane story. I wonder if they simply sell MORE of the product in the UK and therefore charge less?? I dunno. Still, HALF the price? I don't get it.

avalon68 · 08-04-2010 02:59AM

Well I just moved from Ireland to the USA and Im finding it quite expensive here compared to Ireland! I always felt I was living in "Rip Off Ireland" and overpaying for everything but I was spending less in Ireland than here. Health insurance, car insurance, rent, electricity, heating all cost substantially more here than in Ireland (maybe its area specific though).

Cato78 · 08-04-2010 03:03AM

avalon68 wrote: »

Well I just moved from Ireland to the USA and Im finding it quite expensive here compared to Ireland! I always felt I was living in "Rip Off Ireland" and overpaying for everything but I was spending less in Ireland than here. Health insurance, car insurance, rent, electricity, heating all cost substantially more here than in Ireland (maybe its area specific though).

Interesting. I've never heard that before. I can see it being the case if you're in L.A. or NYC. Are you living in either area?

Cato78 · 08-04-2010 03:09AM

Here's an interesting comparison chart I found. Though it doesn't address the " why " of the situation. http://www.finfacts.ie/irishfinancenews/article_1017194.shtml

kuntboy · 08-04-2010 03:30AM

One of the reasons is the governments of the last 10 years let inflation get out of hand with their ridiculous bubble policy.

ei.sdraob · 08-04-2010 08:36AM

well @OP since your comparing USA to Ireland, here goes:

* highly dependant of foreign fuel for transport and energy (and i mean highly!), Unlike US where large chunk of oil/gas demand is filled from domestic sources, this high a knockon effect on everything

* much higher minimum wage pushing up all prices in everything across the board, people say we need them since its so expensive to live here (good argument but it ignores the other side of equation), but they are forgetting that whenever this rises prices go up across the board (classic wage<>price spiral)

* higher cost of public service, example teachers starting off on 10k more here than UK

* not as large economies of scale as US, where corporations like WalMart can grow big and expand and streamline their supply chain to the nth degree

* crazy taxation system with alot of quirks

* the government actively conspiring and perversely holding up the property/rental market not allowing it to become cheaper and in process putting businesses out of business

you mentioned an example of pizza plus delivery being 4times as much, im not surprised

by time you factor in the cost due to expensive fuel, electric, wages and rents and of course VAT, im not surprised at all

one thing about the US is that prices are usually displayed exVAT and you pay it on the till, so there's a psychological aspect too, and of course the exchange rate has been all over the shop in last few years

MaceFace · 08-04-2010 08:39AM

Two big reasons:

1. High minimum wage
2. Very cheap credit

And a bonus:
3. No experience of economic booms

murphaph · 08-04-2010 08:44AM

Cato78 wrote: »

Small world. What part of FL? I'm just outside Orlando, about 45mins away from Disney. I do most of my shopping at WalMart as well. Though I go to the smaller stores for meat, as the quality of meat at Wallies is crap. I accept that food prices are going to be higher anywhere in Europe, but the Irish really do seem to be taken for a ride. I'm sure there must be some economic explanation for it.....I just don't know what it is.

The difference is that Americans know the power of the dollar in their pocket. They know that if they refrain from paying too much, that the prices will fall. In Ireland, people just pay up, rather than doing without. IME Americans tend to be much more disciplined with their spending and will simply refuse to pay over the odds for things. This is the way to do it.

dean21 · 08-04-2010 10:10AM

Because of Greed and the rip off culture

Permabear · 08-04-2010 10:33AM

This post has been deleted.

The_Honeybadger · 08-04-2010 10:34AM

In retail some of the higher cost can be attributed to the franly extortionate rents being paid due to our property boom. Many retailers are locked into upward only rent agreements and it is hard to see a solution to this in the short term.

Glenalla · 08-04-2010 10:38AM

The reason Ireland is so expensive seems to be because the public will pay the prices asked and not stand up against these retailers. I know it can be difficult as we need to buy certain goods and if there is a monopoly it can be hard to drive prices down. I know of one particular firm installing solar panels on roofs of houses, in the north their system was £3300.00 fitted and in the south it was €5500.00 fitted. When I asked the owner why he stated "because they will pay it, its that simple". I was shocked but it proves a point.

Zascar · 08-04-2010 10:49AM

Article in today's independent: http://www.independent.ie/national-news/dear-ol-dublin-no-more-as-city-joins-cheapest-holiday-hotspots-2129341.html

mickoneill30 · 08-04-2010 11:08AM

The better question is probably is the standard of living better in either place. It's great living somewhere that's cheap. It's not so great if you're getting paid proportionally less or receiving less service.
So is the standard in the US much better for everybody than Ireland? I have friends in the US and they have a good standard but there are some aspects of their lives where it's much better here (days off and the amount of work they have to do is one example). It depends what your happy with.

We're lucky here in that the UK is a totally different country but right beside us. I have mates over there doing the same job as me and getting paid a lot less but living at a similar standard to me here because goods / services are also cheaper. But for me as I get paid more I can go to the UK (a couple of hours drive) occasionally and avail of the same prices they get for their wages.

patmar · 08-04-2010 02:59PM

Like most others who have travelled abroad I in the early days made comparisons. Soon realised it was a pointless exercise as the variations in a whole range of products and services have to be examined. Wages and currency were two of the starting points and sure from there on it all became confusing. Eventually I came to conclusion that the only meaningful method of comparison was to asses all assets to be sold and come up with a figure that would be the starting point for a new life in another country

ei.sdraob · 08-04-2010 03:22PM

Zascar wrote: »

Article in today's independent: http://www.independent.ie/national-news/dear-ol-dublin-no-more-as-city-joins-cheapest-holiday-hotspots-2129341.html

Yea we built too many hotels funded by taxbreaks and taxpayer

kuntboy · 08-04-2010 06:16PM

These price surveys are dodgy as hell. For example we're constantly being told that supermarket prices have fallen, and we're shown a list of various goods. This fails to mention that most of the items on the list are things that are bought maybe once a month, and that essentials have actually risen. Another tactic the supermarkets use is to raise prices from say 1.50 to 1.70 and then quickly drop to 1.60, so they can claim it has "dropped" but it has actually gone up.

daithicarr · 08-04-2010 06:41PM

i dont buy that rubbish excuse they use about transport costs and this being a small island, the price off goods in Northern Ireland are much lower which cant just be down to a margianly lower vat and minimum wage.

Basically the prices were so high because we were happy to pay them, or at least didnt stop paying them.

thirdmantackle · 08-04-2010 06:44PM

I'm just back from America - San Francisco. I was in self catering accommodation

Was kinda shocked at the prices of food in the supermarkets. Milk, bread, butter, cheese, ham etc all far more expensive than in Ireland - in my local Dunnes Stores anyway.

In shops you have to add the sales tax to everything
in bars you have add a tip everytime you buy
in restaurants its the same

from talking to friends who live there: rent of apartments is exorborant.

so I don't think Ireland is overly expensive compared to what I have just seen in San Francisco.

Chuchoter · 08-04-2010 06:48PM

Our VAT is too high and the minimum wage is too high, but more than that people were happy to pay extortionate prices for things so there was no need for anything to change

changes · 08-04-2010 08:27PM

Ireland had its first real boom over the last 15 years. We were sort of like a teenager with their first paycheck. We didn't seem to appreciate the value of money and would shell out whatever we were asked for in shops, resturants etc.... buying houses, cars, holidays, furtiture and so on.

We tolerated high prices for a long time but that is begining to change now with the resession... not before time imo.

WHY is Ireland so expensive??

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