DOMESTIC DIP FORCES IRISH INVESTORS OVERSEAS
Ireland, PWC, Amárach Consulting, India, UK, Poland, China
Falling confidence in the Irish residential property sector is making investors look towards overseas property as a more lucrative investment vehicle, according to a survey released at the recent Irish Independent Property Developers Conference in Dublin.
Conducted by Pricewaterhouse Coopers (PwC) and Amárach Consulting, the research found that some 87% of survey participants felt that there are "far better opportunities" in the overseas property market than in Ireland and a further 60% said they would be "more prepared to invest in property assets abroad" compared to Ireland. The survey also found that the most favoured overseas markets for Irish investors are India, the UK, China and Poland.
This increased interest in the overseas sector comes as respondents expressed a mixed view on the Irish economy, with 57% saying they expect a 'dis-improvement' in the overall business climate this year and an overwhelming majority (86%) predict the total number of new residential units completed to fall, from 77,000 last year, to 50,000 in 2008. Some 77% of those surveyed expect a decline in property prices this year of at least 4%, while 40% predict a fall of 7% or more, despite recent stamp-duty reforms.
The survey also revealed that investors and developers believe the key constraining factor for growth in the Irish property market is the availability of finance. Survey participants felt that the attitudes of banks to lending and the difficulty in raising finance are the most important factors influencing the market this year.
Timothy O'Rahilly, a tax partner with PwC, added: "The Stamp Duty reform in the recent Budget is welcome and it appears to have removed any related uncertainty from the property market but its impact has yet to be felt. Three quarters (75%) of survey respondents believe that the reform will have little or no impact on the residential property market in 2008 as more fundamental influencing factors remain unresolved such as the difficulty in obtaining finance and reduced consumer confidence."
Understanding the Irish buyer
The first census from OPP Knowledge, launched at OPPLive 07 in December, found that 3.81million homes are owned by over 6million UK and Irish people resident in the UK and overseas. While many have been attracted to capital growth, there is a growing non-investment motivation to buy according to this research - with 68% of Irish respondents saying they wanted a better quality of life/leisure time and more interesting surroundings.
"The Irish overseas homebuyer market has been thoroughly mined by property companies and media owners over the last few years," said Alex Evans, Group Editorial Director of OPP. "Yet, in spite of this saturation, the Irish are still among the world's most acquisitive buyers and they have a lot of cash and equity. OPP Knowledge will help developers, agents, media owners, PR and marketing professionals and IFA networks to understand the increasingly sophisticated expectations of Irish investors. It also identifies the main objections among Brits to overseas purchases, and how to address them." Source OPP Jan 08