Quality properties most popular as overseas sales slow down

International:Buyers got cautious about buying abroad this year after the mad spending spree of the past few years. Frances O'Rourkereports.

MOROCCO anyone? Dubai? Croatia? Chicago? Cape Verde? Thailand? Brazil? China? India? Kenya?

Kenya? Yes, it seems that early in the new year, one agent will be promoting properties in yet another new and exotic location to the Irish market. Undaunted by clouds that gathered on the horizon in 2007, overseas property agents are still enthusiastically selling their wares in markets from Morocco to Mauritius, Bulgaria to Barbados.

And it seems that the Irish are still buying, but much more cautiously than before: gone, say agents, are the days when punters would place an order for half-a-dozen apartments over the phone and pay over the internet.

It's difficult to guesstimate whether Irish people bought less foreign property in 2007 over 2006, because there are no reliable figures for foreign property purchase. But anecdotal evidence suggests a fall-off in sales in the second half of the year.

Colliers Jackson-Stops overseas consultant Emily Morrissey says in the agency's own end-of-year report "there's no doubt that rising interest rates have had an impact on the market this year".

While the number of deals completed by her agency in the first six months of the year rose by 10 per cent over the same period in 2006, by the end of the year, overall sales were roughly level with the previous year.

If international economic uncertainty has affected overseas property sales, high profile companies that got into trouble in Ireland are having an effect too. And there are rumours that Kendar (solicitor Michael Lynn's overseas investment development company) and Simple Overseas Properties, whose assets were frozen by the High Court earlier this year, will not be the last overseas property developers/agents to get into trouble.

That said, it seems that our collective enthusiasm for buying abroad has only been dampened: although there has been a slowdown in sales and attendance at property shows, people are still doing intensive research about overseas markets, says Eilis FitzGerald of property website OverseasCafé.com.

Emily Morrissey of Colliers also confirms that customers are keen for information and ask a lot of detailed questions before deciding for or against a purchase.

The consensus seems to be that in 2007, the market for cheaper properties suffered, but demand for high end homes from people not looking for rental to help cover repayments stayed strong.

Eleanor Bourke of Knight Frank Ganly Walters (KFGW) has a relatively small but steady volume of customers, most buying properties costing from €1 million to €3 million.

And she says sales this year have been good, both in traditional markets such as France and Portugal, but also in Italy and further afield, the Caribbean (KFGW has sold property on St Kitts and in Grenada) and in Mauritius. And it is the agency which is launching a smart resort in Kenya in the new year, as well as a new development in South Africa.

Paul Daly of Savills HOK is upbeat too and says that while it's true that buyers are more cautious, the agency has had good sales through most of 2007. It had very good sales of apartments in good locations in Boston, Chicago, with investors taking advantage of the weak dollar. After nervousness earlier this year over the uncertain US market, quite a few buyers are getting keen on properties there, mainly in cities such as Boston, New York, Chicago and Las Vegas, because of falling prices.

Those who know the market advise caution, because it's hard to predict how the dollar will fare over the next year or two. And they suggest investors should look hard at the commercial opportunities in the US.

Other buyers are keen on Canada, where the euro goes a long way, whether in cities such as Toronto and Montreal or in resorts from Newfoundland on the east coast over to Whistler, north of Vancouver, where the 2010 Winter Olympics will be held, on the west. Advantages of Canadian property include a freehold buying system like our own, with even clearer land title - and generally, properties are bigger and better value than many you'll find in Europe.

The question of land title isn't to be minimised: anyone thinking of buying in newer markets such as India, China, Thailand, Brazil or Dubai, or even in eastern Europe or Turkey, needs good independent legal advice about this, because many of these countries don't allow foreigners to buy land. It may be feasible for foreign buyers to set up a company to make a purchase, but you do need to know what you're doing. (You also need to find out about taxes, inheritance rights, and so on - such matters, even in countries like France, the market that we buy most property in, are complex.)

Dublin solicitor Tom McGrath, who specialises in providing independent legal advice to people buying abroad in a wide range of markets says that there are a lot of sad stories out there from people who just didn't follow the same rules that they would if they'd bought at home.

The slowdown in sales hasn't been matched by a slowdown in marketing by overseas agents and developers - if anything, their efforts are more frantic than ever. Every day, the Property supplement's e-mails are filled with offers from PR companies, developers and agents at home and abroad - a random look through the last few days yields offers of ski properties in Bansko, Bulgaria; villas in Vilamoura on the Algarve; fractional ownership in Scotland; ski properties in Cyprus (yes, Cyprus); leasebacks in Paris, Lorraine, and Nîmes in France; apartments in Crete and in St Lucia in the Caribbean.

It seems the whole world has heard about Irish buyers' love of buying abroad, and some may not realise that reality has at last bitten into our consciousness - we're no longer the easy marks many of us were a few years ago.

But the overseas party isn't over yet. It seems that old reliable markets like France, Spain, the UK and Portugal still attract most interest from buyers here (OverseasCafé.com monitors website hits to come up with a "country rating" list).

The difference is that buyers are at last taking their time, listening to mantras like "the day you buy is the day you sell" and keeping their cool about buying in a hot climate.