It's not enough to holiday abroad - now we want to own the place. Orna Mulcahy, Property Editor, looks at the dizzy rush to buy a bit of paradise
Louise used to holiday in Westport but, frankly, these days it's quicker for her to get to her apartment in Nice on the Côte d'Azur than it would be to go west for the weekend. The weather is a lot better and the clothes and shoes in the local boutiques are "half the price" that she'd pay at home. Just back from a Bastille Day party, she's planning a long break later in the summer to redecorate her pied à terre.
In Spain, Martina is having a girls' weekend for her pals from the golf club, just before the family join her at their villa for the rest of the summer. Meanwhile, in Lisbon, Paddy is busy furnishing the two apartments he has bought "as a pension". One he is going to let out, the other he plans to use for weekends.
In Thailand, Damien is about to sign for a beachfront villa in Koh Samui, which he has bought because it was such good value, and at home, Mark and Gillian have decided to sell the holiday cottage in Clare and buy a place in Turkey. Mark gets only a couple of weeks' holidays a year and he's sick of spending them in the rain-lashed west.
Sound familiar?
The Irish obsession with property is as strong as ever, only now we're focusing our spending power abroad. With pension funds dwindling, we're pouring money into high-rises in Dubai, apartment blocks in the former Eastern bloc, and holiday complexes in Turkey and beyond. Once content with a package holiday somewhere hot, now, it seems, we're taking the holiday, then going back to buy the property, whether it's an apartment in Marbella, a villa on a golf course in Portugal or a chic apartment for the weekend in Paris or Barcelona. Or further afield. These days Irish buyers are taking a punt on ever more obscure locations: from the beachfronts of Brazil to the deep woods of Newfoundland, where a luxury holiday resort recently saw almost 30 per cent of houses sold to Irish buyers.
Cheap flights, cheap mortgages and the fact so many homeowners have sizeable equity in their property thanks to rocketing house prices have put the Irish firmly in the market for homes abroad. How many lunch hours are spent browsing the net, dreaming about this gîte complex with potential income, or that stunning penthouse on the Bosphorus? Many is the answer.
Meanwhile, Irish estate agents, keen to keep up with the trend, are selling housing developments from Sardinia to Sri Lanka and property exhibitions are advertised most weekends of the year. No one is keeping tabs on what the Irish are buying abroad, though in the last year the Revenue has been attempting to monitor overseas property purchases through the Irish estate agency network. While it's estimated that Irish buyers spent over €2.5 billion last year in overseas property transactions, most of this money went into commercial property investments throughout Europe; recently Bank of Ireland advised its private banking clients that office buildings in Brussels and Paris would be likely to show a handsome return while the Scandinavian countries were also worth a flutter. However, many millions more were spent on holiday villas and apartments. One source estimates that at least 100,000 people living in Ireland have purchased abroad, the majority of them in Spain, France and Portugal.
WITH HOUSE PRICES in Ireland at an all-time high, and interest rates at a historic low, overseas property is seen as both good value and a means of escape - from the weather, from "rip-off Ireland", and from the relentless pace of social change at home. Those who buy abroad often experience a level of neighbourliness and generosity that reminds them of an Ireland of long ago: gifts of farm produce, a welcome at the dining table or someone who cheerfully keeps on eye on their property while they are away.
"When you walk into a shop there, everyone says hello and goodbye, and the service is always very polite." say Louise. When I come back I'm often struck by how rude we've become. And expensive. You can forget about the friendly Irish."
Then there's the promise of cheap living. Who hasn't had to listen to anecdotes from holiday-home owners about six of them going out for dinner, prawns, wine, the best of everything, guess how much it was . . .? Or "I got a bunch of bananas, a bar of soap and six litres of water and change from €2", all of which makes shopping and living in Ireland seem like daylight robbery.
"There's no doubt about it, but Irish people are much more open to foreign travel and foreign domicile, and the increased cost of living in Ireland is one of the factors that is driving it," says Alan Cooke of the Irish Auctioneers & Valuers Institute, many of whose members have diversified into selling property abroad. "People are looking at the cost of living in Spain and France and saying 'my pension will go twice as far there'."
According to Cooke, there are two types of overseas buyers: those who have a lot of money who can easily afford a second or a third home in the sun, and those who buy now with a view to retiring there in the future. "There are plenty of homeowners here who've seen the equity in their house grow and who are now planning to downsize here, and buy abroad with the intention of spending several months of the year there."
The Irish appetite for property is a major factor too. Irish buyers are recognised across Europe as being shrewd and opportunistic, extremely well-informed and ready to act fast if they spot a good buy.
"The Irish are loved [ by estate agents, that is] for three reasons," says Charles Weston Baker, of international estate agents FPD Savills. "One, because they are very good quality buyers at the moment, right across the euro zone. Two, they are very positive and very quick to make up their minds. Far quicker, say, than the Germans."
Weston Baker adds that the the Irish are also so popular because of their personality. "They are always looking for craic. I've just come back from a golf development that we have in Provence, where we've sold about 20 per cent to Irish buyers, and it was just one long party. People want to be in good company, and they're buying for a lifestyle. That's what it's all about, isn't it?"
IMPULSE BUYING IS all very well, but not everyone gets what they want. Miriam Peters, who runs Minnie Peters, an interiors shop in Dublin, has been furnishing clients' homes abroad for eight years, and she says that not everyone gets it right. "A lot of people buy on impulse and end up with a place that is not quite right for them. I would say that people should visit a place several times before parting with money. This can be hard for the Irish as we hate the thought that we could miss out on a deal!"
Cheap flights are also driving the move overseas, with prospective buyers cheered by the notion that they can get to their holiday home fast and for half nothing. In reality, cut-price flights are hard to come by on a regular basis and those who want to use their holiday homes in high season as well as low often end up having to spend a good deal more than they'd bargained for on flights and ferries.
Maintaining holiday homes abroad can be costly, too, particularly those that are not being rented out in between owners' stays. One family with a large house in Italy reckons that it costs them up to €30,000 a year to keep. However, the property has risen in value by almost €1 million since they bought it eight years ago, which cancels out the maintenance charges.
Then there are the unexpected problems. An Irish owner in rural Spain is selling up after just four years because she fell out with a local builder, and her house has since been broken into several times. Another couple want to bail out of Marbella because the rental income they expected to get for their apartment has not materialised, and it's costing them so much to keep that they could have several holidays a year in different locations for the same amount. Then there'sthe young couple who bought a small holding in the Var region of France, intending to spend long summers there. After two years they were bored to death and eventually sold up at a loss.
AS WITH BUYING in any market, the old estate agents' mantra - location, location, location - has to be applied. While property in some locations abroad seems ridiculously cheap, potential buyers should do their homework to work out if it's a good buy, even at a low price. Take those pockets of France where you can still get a rundown farmhouse for €20,000. Rural France can be peaceful to the point of torpor, with bars and cafes closing down at 6pm, and not a lot else to do in those long hot evenings before bedtime. The more remote a property is, the cheaper it is likely to be, but not everyone will want to end up in a hamlet that makes an Irish country crossroads seem like Piccadilly Circus by comparison.
Location is even more important when buying into one of the many sale-and-leaseback schemes. Designed to boost tourism, these government-backed schemes have huge appeal for the Irish, because of the tax breaks and the staged payment system. However, it's vital to visit the site before buying, to make sure that it is somewhere that people will want to spend their holidays. Alan Cooke warns about property investments in some of the EU accession countries: "There are people buying apartments and houses in cities that they have never visited, and borrowing a lot of money to buy them. Anyone who buys in a city that they don't know needs their head examined," he says.
Cooke also warns that in some markets there is a local price, a price for outsiders, and a price for the Irish that might be higher again. Still, there is something to be said for buying in early and waiting for a market to move. Some of Ireland's most astute property developers snapped up chunks of Paris and the Riviera in the mid-1990s when prices were depressed, and have seen their portfolios quadruple in value.
Now it's a matter of finding the next hot market. The smart money is on Portugal, but if it sounds too safe, try Thailand, where Irish property developers are already soaking up the sun - and checking out the price of land.