Is now the time for Irish emigrants to buy property back home?
With house prices on the rise again and an influx of emigrants returning to these shores some expat Irish are looking at buying property in Ireland, either as an investment or with the intention of moving home.
While the recession saw Irish people leaving Ireland in record numbers, emigration is down 13% this year according to the Central Statistics Office and 35,000 Irish people left for foreign shores by year to end of April 2015. The much vaunted economic turnaround is enticing people to consider coming home, Taoiseach Enda Kenny is quoted as saying that the government sees 2016 as the year that the number of people returning will for the first time in recent years outnumber those leaving.
Despite the economic woes during the recession 132,000 people returned to Ireland between 2008 and 2014, the green fields of Ireland remain a draw for Irish people regardless of the economic landscape. Many who have found opportunities on foreign soil hold the dream of returning to home, particularly those with children as the support network of family and friends as well as an Irish education are highly valued. There are many reasons to return home and with the likelihood of property prices continuing to rise, it looks like now is the time to buy.
There are no restrictions to buying property in Ireland as a non-resident, the usual legal fees, surveying costs and stamp duty will apply. The amount of time you’ve been living abroad will have a significant bearing on how you source funds to buy a property in Ireland however. You may have been living in another country but kept a relationship with your bank at home, in which case you’ll find it easier to be considered for a mortgage.
If you have been living abroad for decades and taken citizenship in the country in which you’ve been living, you may curtail your mortgage options as some banks require Irish citizenship.
The government’s introduction of a mandatory 20% deposit holds true for expat buyers too, with some banks requiring 30 or even 40%. The weaker euro against the British pound and US dollar have made it an opportune time for many deciding to return. By selling a property in London, where prices have inflated significantly in recent years, you could be in a very comfortable position to set up home in Ireland.
If you’re buying to rent then you are looking at a different set requirements for qualifying for a mortgage. For permanent tsb a maximum loan to value of 70% will apply to buy-to-rent mortgage applicants instead of usual 20%. In general standard buy-to-rent rates and terms apply to those wishing to purchase from abroad, but should you decide to move home and live in the property then you may qualify for standard residential rates of interest.
If living abroad for some time you may need to supply bank statements and records and a foreign credit history to be considered for a mortgage in Ireland. You might need to be assessed in your career prospects in Ireland as well if you’re planning to move back. You might have made a good living abroad, but that would have to translate into the Irish jobs market.
So the good news is that, if you are thinking of buying from abroad you face no real obstacles, except the obstacles faced by everyone trying to buy a home. Rent-to-buy criteria will apply. However if you are living outside the Eurozone and you are earning in different currency, the exchange rate is a crucial factor. The euro is in a weak position at the moment and that makes it attractive to many to consider investing in the Irish property market, but, as we know the economic landscape can shift quickly and if interest rates certainly won’t stay down forever. It’s fundamentally important that you keep control over the situation and are aware of how any fluctuations can affect your ability to make mortgage repayments.
Alex Willson from Currencies Direct, a foreign exchange firm specialising in Irish property transactions, points out that Sterling has appreciated by as much as 31% against the euro since July 2011. “Although there has been a slight rise in prices in Dublin, property across Ireland still represents great value. And with the increase in the value of Sterling against the euro, this is making the Irish market very attractive to overseas investors and Irish expats looking to move home,” he says.