Foreign Property Crash and the Irish economy

[kerrynorth]

From yesterday's Sindo http://www.independent.ie/business/fore ... 00467.html.

The point at issue is that the mortgages on these investment properties are secured against Irish homes and investment properties which are also proving more and more difficult to sell. There could be hundreds of more Michael Lynn's out in the ether just waiting to happen. I for one could never get the logic of buying holiday homes in the likes of Bulgaria where the prices charged bore absoutely no relationship with any local ability to pay so your resale market could only be other Western investors willing to pay massively over the odds and with the trend in oil prices which result in increased costs in reaching these destinations and cutting the rental possibilities!

House of cards is term that I think that best describes what may be about to happen!

[locke]

I never understood buying in places like Bulgaria where the demographics were so awful. I wouldn't have quite the same level of concern for people who bought in Central Europe or Germany.

Spain could be another dubious place to have bought. Native demand seems restricted to the larger cities and if there's a slowdown in the European economy, buying a second home will be one of the first things to suffer, so any property on the Costas may be hard to shift.

[JCSkinner]

The foreign property market was infested with sharks for a long time, and anyone who bought abroad either from an Irish or British developer or at an expo held here, or after a cheap or free 'exploration flight' abroad, deserves to reap what they sow for putting greed ahead of common sense.

[johnfás]

Indeed, buying in Bulgaria and the likes is somewhat ridiculous as a medium term investment. The houses are so vastly out of the reach of the local people that there is no domestic demand for the properties. Beyond that everyone buying there wants to buy new property so there is little or no resale value on your investment.

Developing in Bulgaria and selling to Irish people at an over inflated price and then maintaining no investment there (like the only people I know involved are doing) - now thats intelligent. If not slightly crude.

[Skin]

I'd take this report with a pinch of salt.

Over the last few weeks (including yesterday) Shane Ross has been having a bit of a go (quite rightly in my opinion) at Eddie Hobbss' Brendan Investments scheme which will invest punters money into foreign property. Apparently there are only 10 days left to go to subscribe so it is no surprise to me that the Sindo has come up with a headline like this.

Broadly I agree with Shane Ross, the charges are outrageous (I think Hobbs has admitted they are on the exspensive side aswell) but far be it from me to predict the value of foreign property in 10 years time.

[riven]

I never understood buying in places like Bulgaria where the demographics were so awful. I wouldn't have quite the same level of concern for people who bought in Central Europe or Germany.

Some nice places in Hungary (lake Balaton). Unfortunately lots of Irish buy in not so nice areas (Budapest).

[JCSkinner]

I never understood buying in places like Bulgaria where the demographics were so awful. I wouldn't have quite the same level of concern for people who bought in Central Europe or Germany.

Some nice places in Hungary (lake Balaton). Unfortunately lots of Irish buy in not so nice areas (Budapest).

And at famously inflated prices too. McWilliams refers to the three-tier prices: price for locals, price for foreigners and price for the Irish.