Introduction by Gerard O’Neill, Amarach Research
Renting the Future
| The Dat.ie Rental Report – 2008 Q4: The Year in Review
An American riend was telling me recently about his grandparents and their crazy habit (inhis opinion) o always keeping a lot o cash in the house. Under the mattress, so to speak. Hereckoned it was a consequence o their having lived through the Great Depression and witnessingover 3,000 banks ail, wiping out a generation’s savings in the process. Such ormative experiencesin our youth tend to shape our values and behaviours over the rest o our lives, long ater theexperiences have passed.Here in Ireland, a generation o young people under 30 will never look at property the same wayagain as a result o what they are now experiencing – and will experience over the next ew years. This is not a storm that will pass, loosening a ew slates on the roo. Rather, we are experiencing anearthquake that will transorm key eatures o Ireland’s economic landscape beyond recognition.As with all such economic upheavals there are social, political and cultural consequences as well.One such consequence that I anticipate is a permanent demise in the Irish love aair – inatuationeven – with property ownership. Especially debt-unded ownership. I would go urther and agreewith uturist Kevin Kelly (www.kk.org) that there’s a big uture or renting – not just property butalso or entertainment, urniture, clothes, cars, etc. Renting is the new buying. The appetite or ownership is a unction o scarcity: when ownership is eectively the onlyguarantee o access to the benets o a particular good or service then other arrangements aregrossly inerior. But when the supply o something becomes abundant – even excessive relativeto underlying demand – then ownership becomes unnecessary. We don’t own the roads we driveon nor the world wide web that we sur yet we have more or less unlimited access to all we wantwhen we want it. An ironic consequence o the recent ailures o nance-uelled capitalism maywell be to undermine orever the oundational aith in private property ownership as a source o wealth and reedom. Though ‘ironic’ doesn’t quite do justice to such an outcome.So much or the uture, what o the present? An appropriate description o many economicindicators right now is summed up by the phrase ‘cli-diving’. It’s a phrase economists have takento using to describe everything rom interest rates to trade volumes to employment to consumerspending. This is my ourth recession in my adult lie and I can saely say I have never witnessed somany indicators change direction so ast nor move so switly in the wrong direction. We’re livingin a whiplash economy, brought to a sudden stop by a wall o ear.
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Gerard O’Neill is Chairman o Amárach Research.He regularly blogs on the state o the nation at www.turbulenceahead.com