This week the Central Bank introduced tougher mortgage controls, which will see most borrowers having to have 20pc deposits up front.
A less punitive arrangement for first-time buyers will compel them to save for a 10pc deposit, but with a cap of €220,000 in place, they face slim pickings in Dublin where lack of supply is pushing prices through the roof.
Unsurprisingly, more and more of us will have to get used to life as tenants and, already, more than a third of Dublin residents are renting at present. But with spiralling rents and deficiencies in the regulations, renting in Dublin is beset with pitfalls. Much needs to be learned from the experience on the continent, where renting has been a feature of life for generations. Germany is often held up as the perfect model, but Denmark makes for a better comparison. It has a similar population to Ireland, has long been dependent on its agricultural and food industries and its fortunes have depended to a large degree on a big neighbour (Germany, in Denmark’s case).
Like Ireland, it too, has seen a shift in population – from rural areas to the city, with Copenhagen getting the lion’s share of new arrivals. And as with Dublin, Copenhagen is the dominant city with a young, vibrant population. But when it comes to renting and buying, they do things very differently.
Hanne Christensen opens the door to her apartment in Norrebro in the heart of Copenhagen and it’s like stepping into an interiors spread in a glossy magazine.
The ultra-modern minimalist kitchen is a study in chrome. The large living area – flooded with light from the huge square windows – resembles many people’s idea of the Scandinavian ideal: elegant furniture, showpiece lamps, wide wooden floorboards painted white. Beyond, lie two bedrooms, also benefiting from large windows: the bigger, featuring little more than a double bed and a long, floor-to-ceiling wardrobe with sliding doors; the smaller, a single bed and all the usual detritus of a pre-school child.
Hanne, a teacher, lives here with her husband Carl, “who works in sales” and their four-year-old daughter Anna. They pay rent of €1,200-a-month and intend to live in this old apartment building near the striking red brick church, Sankt Johannes Kirke, indefinitely.
“We love it here,” Hanne says. “Copenhagen is a very good place for families. It’s not always easy to find the right apartment to rent, but once you do, it’s yours for as long as you want it and you can decorate it any way you please. Like most Danish homes, it was completely empty when we started renting it, but that’s the way we like it because we knew we will be here for years and years, we can furnish it any way we like.”
For Irish people, conditioned to aspire to owning three-bedroom houses with front and rear garden, the thoughts of raising a family in the centre of a major city, in a building with no lift and no provision for a car space might not be so appealing. Not so Hanne Jensen. “We don’t need a car. None of our friends have one. We cycle everywhere.”
Downstairs, in the communal garden at the back of the building there is a lock-up that houses the residents’ Christiana bikes [featuring weather-proof front cabin for young children] and an assortment of buggies.
She says a second child would present no problem. “One bed on top of the other,” she says, the words ‘bunk-bed’ evading her otherwise excellent English. “The only thing I wish we had was a bath, but very few people who live in old buildings like this have them.”
The apartment might be the stuff of Scandi-design dreams, but the toilet is tiny.
Laurits Skov lives in the hipster neighbourhood of Vesterbro. He is a PhD student who half-owns, half-rents his own sizeable apartment in a uniquely Danish scheme called Andelsbolig. Another apartment to make Dublin flat-dwellers drool, he points out that he was lucky to secure his home.
“It can be difficult to get an Andelsbolig apartment,” he says, “because a lot of people want them and there aren’t many available.”
In practice, Luarits took out a mortgage for a portion of the flat’s value, but also pays a monthly fee – a type of rent – into the collective that manages the building. He points out that as a 28-year-old he would be unable to afford to buy a Copenhagen apartment outright, but quips that young Danes are better placed than most to get on the housing ladder because third-level students are paid to attend college. (Known as SU, there’s a monthly payment of €800 for students living away from home – furthermore, there are no tuition fees whatsoever.)
Andelsbolig agreements are not without their drawbacks though. “You have to abide by the house rules,” Laurits says. “It’s three warnings and you’re out – you have to sell. There have been cases of parents who lost their apartment because their children were living there and had too many parties.
“I realise I am very lucky,” he adds. “I lived in London and your money will only get you tiny places to rent and often you end up living a long way from anywhere. For people who love urban life, Copenhagen really is a great place to live in and places like Vesterbro have become very desirable.”
It wasn’t always the case. Up until the mid-1990s, Vesterbro with its proliferation of drug pushers and prostitutes, was considered something of a no-go area for those living in the posh parts of the city, such as Fredriksburg. Now, it’s one of Scandinavia’s great urban regeneration success stories and inhabited by upwardly mobile young families and well-heeled professionals, often working in the creative industries.
As with Norrebro, another blue-collar district that had fallen on hard times after World War II, Vesterbro is full of five-storey century-old buildings that have been given a whole new lease of life. Dublin’s north inner city once boasted similar tenements, but they were levelled in the 1970s and 1980s: few Irish urban planners then could see the potential of Summerhill, for example, especially as the city centre continued to decay and development was focused on sprawling suburbs.
“In the 1970s, people didn’t want to live in urban Copenhagen either,” Laurits says. “They wanted the house with the garden. But it’s very different now because the city works and having the garden is not so important when there are is so much green space and communal areas with playgrounds for the children.”
Professor Jens Lunde of Copenhagen Business School is one of Denmark’s leading housing experts. He stresses that there is no shortage of problems with the country’s residential rental market – including issues caused by rampant speculation during the country’s boom years – but when he talks about the pluses, one can’t help but feel he is describing nirvana – for tenants, at least.
“If you sign a ‘normal contract’ – not a short-term one which is for a duration of less than two years – you can stay in that place for as long as you want,” he says. “For life, if you so wish.”
He looks aghast when he hears that some landlords in Ireland have hiked rents up by 20 or 30pc, according to reports from Threshold, the tenant’s rights organisation. “That could never happen here,” he says. “As a tenant, you would have a good idea of the rent you would be paying, say, five years from now and it wouldn’t be very different to what you’re currently paying. There is a lot of regulation in Denmark.”
Prof Lunde points out two features of the Danish rental model that are effective: first, there is a large proportion of social housing – more than 20pc of the entire market – and there is little stigma surrounding such accommodation; second, a professional class of landlord, enjoying advantageous tax breaks, ensures that permanent rent arrangements can be put in place.
By contrast, Dublin with its high proportion of ‘accidental’ landlords – including those forced to rent out properties they have outgrown but are unable to sell due to negative equity – makes true security of tenure so difficult to achieve.
John O’Doherty, an editor from Dublin, has lived in Denmark for three years. He is paying around €1,300 per month for a 100 square metre apartment in Osterbro, one of Copenhagen’s most affluent districts.
“I get the impression of a city that’s very tenant-centred,” he says. “I’ve heard of cases where people feel they are paying too much rent for the area they live in and they have made their case to LLO [the tenant’s lobby] and they have had their rents reduced.” Remarkably, some have also received a lump-sum payment for the months or years in which they overpaid.
John has lived in London, Baltimore and Chicago, among other cities, but feels that Copenhagen steals a march on the lot when it comes to quality of life. “It is a compact city and everything you could want is no more than a 20-minute cycle away,” he says.
“And it really is a city that’s made for the bicycle. I really got a sense of that when I was home and going between Rathmines and Stillorgan and realised what a considerable distance there is between them.”
He says Danish people are often bemused about how outsiders tend to glorify the Scandinavian way of life, because it’s far from utopian and finding suitable rental accommodation can be an onerous task. A more affordable option for some lies in Malmo just over the Oresund Bridge, in Sweden.
“But when it works, it works very well, and Danish living can be very pleasant indeed.”