Market for Overseas Property will increase in the Irish and UK market.
According to research carried out by OPPknowledge the market for overseas property is expected to strengthen in the Irish and UK markets. This is the first ever independent research to have been carried out in the industry to date. Property marketing companies in Ireland and the UK should benefit from future growth in the overseas property market according to the research. According to Noreen Hynes Managing Director of Aquarius Properties "One of the key challenges facing the overseas property industry is the lack of robust and empirically sourced information on the industry and it's potential or existing clients". According to the research a total of 1.21 million overseas properties are held by UK and Irish residents. Of this 60,000 overseas properties are owned by Irish residents living in Ireland and 1.16 million overseas properties are owned by UK residents living in the UK.
If you include the overseas properties owned by UK and Irish people permanently living abroad the numbers are larger. The total number of overseas properties owned by UK and Irish residents living permanently abroad comes to 2.6 million of which the Irish own 140,000. In value terms the total value of the UK and Irish Overseas Property market stood at stg£44 billion in 2006 and £ 40.4 billion relates to the UK market and £4 billion relates to the Irish market of which €1.2 billion relates to the Irish people living in Ireland and £2.8 billion to Irish residents living abroad.
Over 4,000 consumers were surveyed and over 880 agents from the UK and Ireland.
France and Spain remain the strongest markets but Italy and Portugal are increasing in popularity. Spain despite all the bad press in recent years is expected to continue to grow up to 2012. The profile of Irish buyers is changing however with more younger people on lower incomes getting on the property ladder through purchasing property overseas. Over 79% of future buyers are aged between 25 and 49 years and they earn between €20,000 and €80,000. This will have implications for the types of developments being marketed on the Irish market . Over 62% of future buyers want long term capital growth and this will also have an impact on the locations consumers will choose to purchase in.
Commenting on this research Noreen Hynes Managing Director of Aquarius Properties said that an important aspect of the research that was carried out was that
90% of those people who already purchased an overseas property said they would recommend others to buy. This is an interesting statistic considering all the bad press the industry gets. Over 40% of UK and Irish owners say they plan to purchase more overseas property and they expect to see strong returns in the long term. Irish buyers view their property abroad more as an investment than as a holiday home and this trend is expected to continue. Also most owners rental expectations have been met or exceeded. This research was done prior to the recent credit crunch in the market and the recent change in the markets may have a short term impact on the market for overseas properties but the trends wont change. One thing is for sure the overseas property market is here to stay and Domestic Agents like Aquarius Properties should expect their business to increase by over 21% pa between 2006 and 2012 according to the research.
Lack of trust of Overseas Property companies remains a problem in the industry and according to the research those people who deferred their decision to purchase did so for two main reasons, lack of trust in agents and developers and fear of making the wrong decision.
" People should ask agents and developers if they are members of an industry association before using them , this should help drive standards in the industry ". It is extremely important for developers to be members as they handle clients money. Overseas Agents based in Ireland should not handle clients money, they act as marketing companies only. It is disappointing to see that only 19.8 % of UK and Irish agents claimed to be members of an industry association such as FOPDAC, NAEA or AIPP. Noreen Hynes welcomes this research and hopes it will be the start of an annual review of the Industry which is still relatively new. In any new industry there are teething problems and these are being sorted out over time. Consumers are getting a better understanding of the risk factors of purchasing overseas properties and they need to know what their own comfort zone is before deciding to purchase. Buying off plan is more risky than purchasing a finished building and the returns are greater especially in a growth market. As most future buyers are buying for capital appreciation more buyers may choose to purchase off plan in the future. If purchasing off plan they should purchase through an Irish Overseas Property company who can assist them with all the additional services they need such as Legal Advisors, Fit out companies and provide them with a good after sales service.