BACK IN THE heady days of 2006 you could not talk to someone without getting a full briefing of the second home they’d just acquired in Croatia or some other such exotic location.
Fast forward nine years and people are markedly more cautious about investing abroad.
However, with things turning around at home, the market for it is beginning to grow again.
To get and idea about whether the Irish appetite for foreign investment, TheJournal.ie spoke to Gavan Russell from Locations.ie.
Do you think people are still a bit spooked about buying property abroad?
People are a bit more selective now and take their time. Back in 2005, 2006 and 2007 people were thinking, ‘oh the prices are going up, I better jump on board’ and perhaps didn’t do enough homework or do enough research about what they were getting into. So, yeah, people are just a bit more careful and take their time.
Remember when everyone was buying holiday homes in Cape Verde? That was a bit mad, wasn’t it?
Cape Verde was a destination that people went to. Now there is a lot less of that type of investment where people are buying off-plan in a country that was due development. Those islands hadn’t really been developed at all until that time.
Now people are saying a safer place to invest might be the likes of Germany. The likes of Berlin where there is still quite low prices. They have stayed low throughout the recession. They stayed pretty stable or even grew in some cases depending on the city.
And rents always remain the same over there, don’t they?
It is a nice, safe bet in terms of property. Rents are controlled so you know kind of where you’re at. The prices haven’t really gone through a boom or bust. There has been a kind of steady increase in line with inflation. It hasn’t been dynamic. People would like to have that kind of safe invesment.
Either if they are conservative or if they want something in their basket of invesments that is low risk. Germany would probably be seen as a lower risk place to invest in property.
What are some of the crazier places people buy property?
Well, if you go back people were buying in places like Panama and anywhere you can think of really. There is a lot less of that now as people are more risk adverse compared to what happened previously.
Where would you advise people to go?
Maybe the markets they would buy in would be the more traditional ones. Spain and Portugal would be the ones you see people buying into a lot at the moment.
With the likes of Spain people are looking at that as a lifestyle investment. They can buy something now that seven or eight years ago might of cost them double the money. They are getting value from it and if they hold onto it for a number of years, prices in Spain will probably rebound as they have done in Ireland. Maybe not as quickly.
We have seen this year Spanish prices starting to very slowly start to turn a corner. They have been going down for eight years in terms of price values. Now this year, in certain areas, the Costa Del Sol, things are starting to go back up in price.
Are good house prices abroad enough to drive people out of this country?
I guess it could be a factor in that – we see people wanting to work in Spain – obviously there isn’t a lot of work in Spain, with the unemployment levels.
Someone who can work abroad and it doesn’t matter where they work. You might get someone coming in and saying ‘I wouldn’t mind working in Berlin because I am involved in the art world and I can buy an apartment there for a fraction of the price’.
Funnily enough we had a lot of Irish clients who were living in New York and they are buying loft apartments in Berlin. That has started to happen again. Irish clients have obviously come back to compete with certain markets but there would be that where someone might say ‘I’m a certain age, and I’m mobile’.
It is probably just a factor in it. It is not the driver, It is probably one of a number of factors that could be involved in the decision.
Getting a lawyer abroad does not sound like it would be an easy process. How would conveyance generally be done?
It is really just they need to secure a solicitor abroad, you know. They should approach it carefully. A few clients in the past would have rushed into situations without due diligence. They might of bought off of plan and took those kinds of risks.
People really just need to take precautions by engaging a reputable solicitor or lawyer and European law is different so their own Irish solicitor wouldn’t be able to handle the conveyancing. Obviously they could look at the documentation on their behalf if they wanted them to.
If they engage a solicitor abroad then it should work sort of the same way that it does here, as long as they take the time and don’t rush into it.
Gavan Russell’s advice for buying property abroad
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