Only ex-pats can afford to buy now, says
LAST WEEKEND estate agents cheerfully reported that the “top end” of the residential market was showing signs of improvement, as, since the beginning of the year, they had sold 50 houses at €1 million plus and a certain percentage of those sales had even exceeded the €2 million mark.
Given that, a mere five or six years ago, well-located but modest three-bed terraced houses were selling for that amount and considerably more, they hardly expected us to jump up and down with excitement at the news.
And considering that a certain percentage of these properties would have been purchased within the last decade for approximately three times the figure they have recently achieved, their vendors are unlikely to be thrilled either, since despite selling their home many are probably still up to their necks in debt.
But the estate agents did at least confirm that many of the trophy properties are being snapped up by ex-pats, who are now returning to the Irish property market after a long absence. And, in much the same way as most of the buyers at Allsop/Space distressed property auctions are cash buyers, we must presume that so too, are many of the buyers at the top end of the trophy homes market.
And, if we were in any doubt about the increase in the number of cash purchasers and the lack of mortgages being issued, we are now under no illusion, as it was also confirmed this week that there has been a further drop of 2.4 per cent in bank lending for household mortgages since this time last year.
But the one snippet of news which might give more prospective ex-pat buyers the incentive they need to repatriate their savings and invest in Irish property was the result of research from the Central Bank, which found that property prices in Ireland have not just hit the floor but have gone straight through it, as they have overcorrected by between 12 and 26 per cent.
And the reason for this over-correction, much as one might expect, is a lack of confidence in the home property market (would you blame our poor citizens?) and the further drop in bank lending for household mortgages.
So, Irish ex-pats are taking this opportunity to return to the “auld sod” where they can now get a lot more bang for their buck. Much to the amazement of those already living here, many of whom, would be gone in the blink of an eye if they could, our ex-pats quote “lifestyle” as the number one reason why they wish to return to this recession-ridden country, along with the natural desire to bring up their children in close proximity to their family and friends.
To clarify, I’m not talking about recent emigrants, who’ve been driven out of Ireland in the last five years, by the Celtic Catastrophe but the ones who left before that, in the last bad recession (now regarded as a minor economic blip), in the 1980s and early 1990s.
Many are in their 40s now and have young children born within the past decade, after their parents completed the obligatory world tour, found their niches and established their careers. And ever since these parents have been planning their exit strategy and their homecoming, when the time was right.
Unlike those who left these shores in the 1950s, this new breed of ex-pat has never worn rose-tinted glasses and has kept a watchful eye on every move we’ve made in their absence.
Whereas the 1950s emigrants who “did well” in America caused consternation when they visited home, with their loud voices, strong accents, sun-tanned skin, brilliant white teeth and “drip-dry” clothes in lurid colours, the 1980s emigrants were far more worldly and discreet as they quietly observed our rise and our fall from grace from a safe distance.
And as Ireland’s light began to shine in the late 1990s, we became increasingly inhospitable to our ex-pat visitors, taking the view that they had deserted the ship when it was threatening to sink and now wanted to return for a slice of the action.
In fact, in time the roles were reversed completely and we went to visit them instead. No longer was there any talk of ex-pats returning home to live, as by that stage, property prices had spiralled way out of their reach.
Only Irish citizens could afford to buy Irish property at the time, and somehow it never dawned on us that there was something a little strange about that.
Time to roll out the red carpet again and welcome the return of the Irish diaspora. We need every one of them home now, along with every last cent they have in their back pockets.
Isabel Morton is a property consultant