UK international property investment continues to increase in Ireland

on Feb 13, 2015

The continued strength of sterling against the euro has resulted in an upward trend in the number of UK residential property investors showing an interest in alternative European property markets. Factors such as the rise in UK residential property prices have brought with it issues of affordability, further incentivizing investors to look beyond the UK for investment opportunities. In this context, the Irish market is fast becoming a popular destination for UK based residential property speculators as the price of housing, particularly in Dublin, continues to grow apace.

Research carried out by Irish property advisory firm Sherry Fitzgerald noted that Dublin house prices rose 1.2 per cent in the fourth quarter of 2014 and 18.0 per cent in the twelve months to the end of December. Despite this substantial growth, current house prices in Dublin remain some 44 per cent off peak prices seen in 2006.
The UKs leading property portal, Rightmove, noted an increase in the number of enquiries for Irish property of almost 50 percent in 2014 when compared with the previous year. Remarking on increased interest from the UK, Sherry Fitzgerald country director Triona Gorman said, as quoted by The Irish Times:

“There are a lot of people over there [The UK] looking anywhere at the moment for good investment opportunities and they are seeing the value of Ireland […] There are great rental returns and even if they’re only making a short-term investment they can expect to make an immediate return on their money”.
Perhaps surprisingly, the OECD recently described Irish property as being undervalued, by as much as 60 percent in some cases, indicating that there is still potential for significant growth in the Irish market.

To complement this growth, investors whose main source of capital is sterling are at a particular advantage. Currency movements over the last year have meant that a property worth €500,000, now costs £26,041 less in sterling terms than it would have done in 2013. The economic outlook for Ireland in the medium term is also positive, according to the latest forecasts provided by the Department of Finance. Unemployment in Ireland is expected to fall to approximately 10.2 per cent in 2015 and 9.4 by 2016. The favourable growth in property prices in 2014 combined with positive forecasts for the country’s economic outlook should see Ireland maintaining its popularity with UK residential property investors.

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