By Brad Wrigley
Well, according to 15th century Western Philosopher Niccolo Machiavelli, "As long as the great majority of men are not deprived of either property or honor, they are satisfied". Dear Niccolo how wonderful to live in a day impervious to the wrath of subprime mortgages, interest rates and stamp duty. There is little question that the home buying equation in the 21st century is a different beast entirely. Whilst Cromwell's key decision may have been how many soldiers where required to take Trim castle in 1649, property buyers must answer the following 3 questions: the Why, the Who and the What before a single sample of Zuber wallpaper is even entertained.
Why Buy Now?
I feel that even now, at a time when relatively high interest rates within Ireland may be jamming the door shut for the heavily mortgage reliant resident purchaser, the door has swung freely open for the opportunist international and the domestic mortgage free/cash rich investor. The secret to success, if you want to call it that, is for the buyer to be in the right place at the right time, and in a position to act expeditiously and aggressively. With a number of shrewd investors already out there snapping up the bargains, time-poor home buyers will be left with the scraps.
There are also two many "glass half empty" organisations publishing reams of doom and gloom on the Irish property market. If an investor has the gift, and the richest ones usually do, to take a step back and have a look at what the current climate is actually telling us it isn't all that bad.
According to TSB/ESRI house prices have declined by 4.7% in the last 12 months. If we look at this in comparison to the 36% drop in the ISEQ general index since last February then this is positive news as far as our clients are concerned. From an investment perspective we are finally seeing a glimpse of realism in what has been an over inflated market for too long to remember. A house should only be worth what a buyer will pay for it and not as much as a vendor demands for it. For investors, this means that a 10-15% bid below asking price must be taken seriously and is a far cry from the bidding wars that regularly took properties 25% above their AMVs 12 months ago.
It's so important to remember that a large number of the wealthy elite in Ireland at present are the home buyer generation from the 80s who bought when the market was at its lowest. The sensible may buy during a bull market but the richest are the bears. In addition some reassurance for the prospective purchaser must come from Michael Hennigan of Finfacts belief that regardless of the bearish sentiment the economy is expected to continue to grow albeit at a much lower level.
Who is investing?
Our Property Finder clientele are from a variety of professions, locations and backgrounds and they are all bestowed the same absolute confidentiality and anonymity. We aim for a very specific market and offer a very exclusive service. Consequently, our clients can be in the public eye or may just wish to keep themselves to themselves.
What we have found though is that up to even 6 months ago there was a growing interest in the higher end of the property market from an international audience. At one stage the demographic was split between the USA, UK and Ireland at 50%, 35% and 15% respectively. Uncertainty in the US economy and the decline of the dollar has halved even the initial enquiries from our American market. My belief for the year ahead is that interest from the UK and from the domestic investor will increase. Renovations and remodelling of high-end property is a great way to add value to a home and we would envisage that many investors will be requesting us to look for these opportunities.
Economic growth here in the past decade has made Ireland one of the most desirable places to live in the world. Long gone are the days of high emigration and, thankfully, expats and their families are returning to this beautiful country. Ireland has so much to offer and improvements to the country's infrastructure mean that more and more families are happy to reside outside of the major cities and commute on a daily basis if necessary. This has, however, increased the demand for properties with designated helicopter pads! Of course, being able to move outside of a major city commuter belt also allows buyers to pick up so much more for their buck.
What's the next step for an investor?
Acquiring a dream property should be an enjoyable process. Every person has different lifestyle aspirations and these should be managed to deliver a very special home at the end of the project. Sometimes this is simply finding the perfect property but sometimes this is redesigning a property to exact requirements.
Of course hiring a property finder is not the best solution for everyone. Curiously this has little to do with additional cost as fees are usually absorbed within the negotiated final purchase price anyway. It is more down to necessity. A buyer looking for 3 bedroom semi within 10 miles of Cork City will find a plethora of options available to them on any of the property search engines. If they are not constrained by time or their location then a few phone calls later should have them viewing that dream home.
However, property finding can be an expensive and energy sapping process for the time poor or international buyer. Giving up your annual vacation or holiday, or even your weekends to trawl estate agents all over Ireland will squeeze the enthusiasm out of even the chirpiest buyer! In these circumstances, a good property finding company will prove both cost efficient and sanity preserving for their Clients.
Regardless of whether an investor or home buyer uses a service such as ours I would always advise buyers to approach any investment remembering that we are in a buyers market. Negotiate hard and do not be afraid to walk away if a property is valued above what you believe it is worth. I think you will be surprised at how many call-backs you receive on a Friday afternoon.
Ireland's leading luxury property finder Brad Wrigley specializes in helping international buyers or renters find their dream home within Ireland. If you want to find out more about how buying or renting a property in Ireland could be perfect for you or your family, book your free no obligation property consultation at www.emeraldhaven.com
Sunday, March 2, 2008
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