The arrival of the euro in 2002 made life a lot easier for those lucky Irish people who owned houses overseas. At that stage, the bulk of foreign home ownership was concentrated in countries such as Spain, France and Portugal, all of which joined the euro at the same time as the Republic.
This meant easier payment of mortgages and, more importantly, the disappearance of the foreign exchange risk that previously existed.
Four years on, Irish people with homes in other euro zone countries continue to benefit from the stability and low interest rates the euro has brought. The intervening years have, however, brought with them a new phenomenon - the purchase of property in Central and Eastern Europe.
This has brought us all back to our pre-euro days of foreign-exchange risk, because none of the newer property investment territories have yet entered the euro zone, even though many are now members of the EU.
So how can this new batch of buyers manage their financial exposure to other currencies and markets? One answer is to approach their domestic bank.
Aine McCleary, head of retail sales with Bank of Ireland Global Markets, explains that while her division does not offer overseas mortgages in other currencies, it does provide "currency services" for people who have invested or are about to invest in property abroad.
Put simply, these services revolve around managing risk by using a range of financial instruments.
"The most common situation that we deal with is a customer looking to lock in a rate on the day that the property is closing," says Ms McCleary.
She explains that this typically involves a "spot" foreign exchange deal, whereby euros will be converted into the required foreign currency on a particular day so that this can then be forwarded to the seller.
Another option for many, according to Ms McCleary, would be to consider a foreign exchange (FX) forward contract.
"An FX forward contract would generally be used when payment for a property is due in the future. The contract is between the purchaser and their bank and specifies an agreed exchange rate and currency amount for payment and delivery on a future date," Ms McCleary says. She points out however, that this type of contract will exclude the buyer from any beneficial movements in currencies after the lock-in.
A further option, Ms McCleary suggests, would be to purchase an FX option at an upfront cost. She says this type of contract is most useful for large investors.
"This product gives the purchaser the right, but not the obligation, to lock in a pre-agreed foreign exchange rate at a certain time in the future," she says.
"Unlike the forward contract, the customer can walk away from the option if the property deal falls through or the market rate is more favourable at the time the property deal closes."
