The irish property market - expensive but worth it?
Lying on the edge of Europe facing out to the Atlantic Ocean sits Ireland, one of Europe's smallest countries and often described as 'The Emerald Isle". A beautiful country characterised by vibrant, colourful cities and towns set amidst endless unspoilt green fields, Ireland is now officially the best place in the world to live. Combining increasing wealth with traditional values gives Ireland the conditions most likely to make its people happy, according to the Economist's quality of life assessment for 2005.
Add to this its longstanding reputation for a green and clean environment and Ireland has become a very desirable place to live in. Already 60,000 Americans have claimed a piece of Irish soil as their own, planning to live out their days in the Celtic gem and many of our Europeans neighbours are following suit.
Ireland's desirability comes at a cost. Increasing wealth, resulting from the Celtic Tiger boom years has pushed property prices up to one of the highest levels in Europe. Consequently, property in Ireland is not cheap. A recent International Monetary Fund study revealed that Irish house prices are overvalued by 10-20%. It's almost impossible to find a house in Dublin, the city's capital for under ?200,000 and anything that becomes available for less tends to be the size of a shoebox or in typically undesirable locations. Move out to the suburbs and you can expect to pay anything up to ?600,000 for a mediocre 1970's style home lacking in any great character or charm. Buying a character home dating between the 1850's and 1950's in Dublin and you can expect to pay anything between ?600,000 and ?1.5 million. New homes tend to be the cheapest to buy, averaging around ?300,000.
The demand is fuelled further by an increasing interest by the Irish themselves in property investment. The uncertainty following 9/11 has led many to see property investment as a more reliable alternative or supplement to the pension fund! One third of all mortgage lending by Irish financial institutions funds people investing in the buy-to-let sector. There is much speculation about how long the investor buzz can be sustained and how much further prices can rise. Will the market collapse or will Ireland become an exclusive property market, similar to Jersey in the Channel Islands, where properties under the ?1 million mark are the exception?
All indications suggest that Ireland will continue to sustain growth in the property market. However, the intrepid investor or buyers seeking a new home in Ireland may want to consider carefully how and where to invest in the Irish property market. While rental yeilds have fallen to under three percent, Ireland has experienced the biggest property price increase in the EU, with a 187% increase over the period between 1997 and 2004. Whether rental yeilds recover or not, investors find excellent returns in capital appreciation alone?
So, it may not be possible to buy at the prices that attracted thousands of Americans to the Irish shores in the 80's. It is still possible to find good value property, capable of yielding reasonable rental returns and appreciating steadily over time.
Tracey Meagher owns and maintains PropertyAuthors.com, a website offering free property investment ebooks and articles. A full detailed version of this article is available at the PropertyAuthors website. She also runs many property newsdesks, including Property Newsdesk Central and Eastern Europe and Property Newsdesk Bulgaria
Article Source: Messaggiamo.Com
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