Friday 15 December 2017

Falling sterling hits UK interest in Irish property

UK-based buyers – largely returning Irish emigrants who left here in the 1980s or after the recent economic crash – had been making up to one-in-five sales in some counties, particularly those on the Border and in popular tourist areas
UK-based buyers – largely returning Irish emigrants who left here in the 1980s or after the recent economic crash – had been making up to one-in-five sales in some counties, particularly those on the Border and in popular tourist areas
Mark Keenan

Mark Keenan

The Irish property market is being hit increasingly hard by Brexit, with estate agents all over the country reporting an average fall-off in demand by one-third from across the water.

UK-based buyers - largely returning Irish emigrants who left here in the 1980s or after the recent economic crash - had been making up to one-in-five sales in some counties, particularly those on the Border and in popular tourist areas. Most have properties to sell in Britain and have lost purchasing power thanks to the difference in sterling.

But at the same time, overall overseas enquiries for Irish properties are up, according to the Real Estate Alliance (REA), which estimates that close to one-in-five Irish property sales (18pc) nationally is currently made to someone who is based abroad.

REA, which represents more than 50 property firms nationally, estimates that property enquiries from the UK have fallen by 32pc compared with the same period last year. "Our agents report that enquiries from the UK have dipped by a third since the Brexit vote, and the attendant fall in the value of sterling against the euro," it said.

The Brexit impact is being felt most in Border counties with holiday homes. Agent Michael McElhinney of Bundoran said that sterling buyers previously accounted for half of all properties sold. "The exchange rate drop has resulted in reduced enquiries by about 30pc and equivalent sales," he said. "Brexit has had a negative effect on the market and brought in uncertainty."

Despite the fall-off, UK ­buyers still account for 37pc of all overseas-based sales here.

Meanwhile 19.6pc are now coming from the US, 18pc from Australia, 15pc from mainland Europe and 11pc from other locations - especially Canada.

"A total of 78pc of our members report an increase in enquiries from overseas overall in the last year, with the average agent seeing a 22pc rise in calls from outside Ireland," McElhinney said.

In contrast to the fall in British-based buyers, the Trump factor and a strong dollar is boosting enquiries for Irish properties from parties based in the USA.

Almost one-in-five of overseas enquiries about Irish property is now coming from the United States, from almost nothing two years ago, according to the Real Estate Alliance nationwide survey.

Eamonn Spratt, chairman of the Real Estate Alliance, said: "Property buyers from the US are increasingly securing homes and investment properties in Ireland, buoyed by a strong dollar and the lure of a resurgent economy for emigrants."

The surge in demand from American-based parties has spurred the REA to organise an exhibition of Irish property for sale in Boston which will take place at the Lenox Hotel on March 23.

"The average house price in the US in November 2016 was $365,200 (€341,739), compared to our Average House Price survey national value of $216,856 (€202,926), so there is obvious value for American buyers in Ireland," said Mr Spratt.

"But the biggest increase in calls came from Irish emigrants planning to return from Australia, a tally which increased from 11pc of overseas based enquiries in 2015 to 18pc in 2016.

"The resurgent economy is having a positive effect on the market with the number of overseas buyers enquiring about moving to live and work in Ireland rising by 9pc over the past year."

Exactly 40pc of sales to overseas purchasers are for properties valued above €200,000 - a rise of 9pc on the 2015 figure.

The biggest change in the market has been the drop of 25pc in sales of properties below €100,000, said Mr Spratt.

"This reflects the decline in stocks of excess housing for under six figures in rural counties."

Irish Independent

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