Surge in overseas sales led to special 'Irish price'

Cheap flights, cheap mortgages and sizeable equity at home were key factors that led Irish people to buy second homes abroad

THE 30-YEAR-OLD first-time buyer from Dublin wanted to buy a property at home - but couldn't afford to. Still, he wanted to get on the property ladder, so he borrowed as much as he could with help from his parents and set off for Budapest, where he invested in an €85,000 apartment. With the rest of the loan, he snapped up a townhouse in Florida.

"The most I can borrow as a first-time buyer is €160,000," he told The Irish Times Propertysupplement in 2005. "And you can't get anything at home for that."

It was an unexpected twist in the foreign property story that had become big news in Ireland towards the close of the 1990s. Foreign property exhibitions became regular weekend entertainment as agents wooed buyers eager to hear about great value homes in sunny spots abroad.

No one has yet put a figure on just how many Irish people bought abroad in the heady years of the past decade, but there was a lot of anecdotal evidence to say that Irish buyers were gadding around Europe, America, and increasingly exotic spots from Cape Verde to the Caribbean, Bulgaria to Dubai.

The Irish, as foreign developers found, were quick to make up their minds, and happy to buy off plans. A lot of us weren't aware that foreign agents had a local price, foreigners' price - and then an "Irish price" which was invariably higher.

This supplement's Take 5 feature first appeared on March 18th, 1999, when we found that for £250,000 you could buy a three-bedroom second-floor apartment in Charlotte Quay in Dublin's south docklands - or a five-bedroom house near Disneyworld in Florida, a three-bed villa in Provence, a two-bed apartment in Puerto Banus or a two-bed apartment in the City in London.

Appealing as it did both to Irish people's taste for fantasy foreign properties and to our masochistic streak, it soon became one of the best read features in Property.

Particularly popular were the weeks when we'd find a hovel down a boreen for, say, £300,000 compared to a chateau in France and an island in the South Seas.

Cheap flights, cheap mortgages and the fact that so many homeowners had sizeable equity in their homes thanks to rocketing house prices put the Irish firmly in the market for homes abroad. Buyers included taxi drivers, farmers, civil servants, journalists and of course business people.

Typical were people like Kells, Co Meath carpenter Kenny Timmons, who bought a studio apartment in Manhattan for $760,000 (then €558,823) in the summer of 2007.

He bought it through an agent in Lucan sight unseen, becoming one of the earliest investors in the scheme.

Savvy individuals worked at building a portfolio using sound investment principles, coolly assessing likely rental income, capital appreciation, planning their exit strategy.

More of us just wanted a buy-to-let place in the sun where we could take some holidays, retreat to on retirement and use to supplement pensions.

Sale and leasebacks, mainly in France, became popular, although many buyers didn't check the small print to see if they'd have to put it back into management's rental pool after the first nine or 11 years' lease.

France, Portugal and even Spain, despite over-development and scandals, remain the most popular markets for Irish overseas buyers. But Irish people have bought properties in Bulgaria, Poland and Hungary; in Turkey and Cyprus, Dubai and India, Thailand, South Africa and Brazil.

By the end of 2007 and the spring of 2008, reality began to bite: Michael Lynn's Kendar Holdings crashed, Simple Overseas Properties' assets were frozen and the Revenue Commissioners made it plain that one way or another, they aimed to track down people buying overseas with "hot" money or not declaring income from rental abroad.

Agents are still offering exotic properties - in Egypt, south America, etc - for sale. But it's too early to tell if many of us are still buying.