Housing availability, quality of life and a desire to leave the big city behind are driving innovation and growth around the EU. Smaller cities are becoming new centres for tech start-ups, remote work and sustainable development, challenging the dominance of traditional powerhouses such as London, Paris, and Berlin. While return-to-office mandates threaten the future of remote work, there is still hope for those who yearn for the more affordable house prices and lifestyle benefits of the country and the coast here in Ireland, with targeted investment, clusters in medtech and beyond, and IDA Ireland’s stated commitment to the regions. Well-known economist Jim Power says the cost of housing in Dublin, both to buy and to rent, continues to rise to levels that are “simply not sustainable”, for many younger workers in particular. “This continues to be the push factor that is driving people out of Dublin to seek more affordable housing in the regions, but not all of those can get jobs, and thus [they] become beleaguered commuters,” he notes. “And while some employers are pushing back on working from home, the genie is out of the bottle, and for many who have enjoyed the benefits of working from home and the quality of life that comes from living in the regions, they will seek alternative work rather than move back into the Dublin rat race.”Power says the good news is that the trend of higher-quality job creation in the regions is continuing apace, and in 2025, 57 per cent of the investments from IDA Ireland-supported companies were in the regions. “The pull factor for the regions includes more affordable housing; a better quality of life; less stress; and towns and cities that have more and more of the offerings that were once solely the domain of Dublin.”Jim Power, economist The Government appears cognisant of this: last year, Minister for Enterprise, Tourism and Employment Peter Burke announced details of an €18 million investment in 40 projects across the State under the Smart Regions Enterprise Innovation Scheme, designed to strengthen regional enterprise, drive innovation and support sustainable economic growth.Marie Hyland is a research officer with Eurofound. She says that its research still shows persistent rural-urban gaps in economic development and living conditions across the EU. “Employment rates and human capital are higher, on average, in urban areas, and the rural-urban gap in median income has widened over the past decade.”However, she notes factors that may make living in rural areas more attractive, particularly in relation to housing: “Data from Eurofound’s 2023 report showed that only 6 per cent of rural households were overburdened by housing costs, versus 9 per cent in urban areas. Moreover, rural residents were more likely to own their homes, they tended to live in larger dwellings and they suffered less from pollution and crime.”Hyland echoes Power, saying research from Eurofound shows that Europe’s housing affordability crisis is concentrated in cities and is increasingly shaping where people can afford to live. Marie Hyland, research officer, Eurofound For young people in particular, she says, urban housing has become “largely out of reach”. This is not simply an Irish phenomenon – Hyland points out that across the EU very little of the rental supply in cities is affordable for someone on a median wage. “In Bulgaria, Ireland, Poland, Portugal and Spain – and parts of Austria and Italy – more than 80 per cent of the median wage would be needed to rent a standard two-room apartment,” she says. “Rural areas are generally more affordable, but offer fewer properties, particularly to rent.”Grainne Convery of relocation specialists Cronin Group, says the company is experiencing strong and growing demand for relocation and home-search services across Ireland’s regional cities. “While Dublin remains active, we are seeing significant growth in locations such as Cork, Galway, Kilkenny, Waterford and across the wider east coast,” the Cronin Group global mobility specialist says. “Cork continues to be one of the busiest regional markets we support, fuelled by strong employment growth and major residential development activity, while Galway is also seeing exceptionally strong interest, particularly from those who are attracted by the lifestyle, community atmosphere and cultural appeal of the west of Ireland.” The company is also seeing increasing relocation activity along the east and southeast corridor, particularly in Kilkenny and Waterford, where clients are looking for commuter-friendly locations and improved quality of life while remaining connected to major employment hubs. “Overall, the demand for relocation support in regional Ireland has become far more balanced geographically over the last number of years,” says Convery. Cronin Group’s clients regularly cite ongoing housing supply shortages and strong competition in Dublin. “This has meant rising rental and property demand outside the capital as people seek improved affordability and lifestyle balance. The primary need across almost all client groups is securing suitable housing in what continues to be an extremely challenging and competitive rental market.”Increased hybrid and remote working, allowing employees to relocate outside Dublin, as well as continued investment and job creation in regional cities, particularly in the tech, pharma and medtech sectors, are also driving the company’s customers away from the capital, Convery says.It is Power’s belief that growing regional employment must remain a priority from an economic, social and environmental perspective. “With technological innovation being driven forward at a dramatic pace, the opportunity for high-quality employment in the regions can only grow,” he says. “There is no reason why centres of excellence in areas such as medtech, fintech, and R&D cannot become a powerful feature of our regional towns and cities.”