Hot on the heels of reports from the Irish property market that show rental rates are falling and it’s getting harder and harder to make property investment pay, we ask ‘can you still make money from property in Ireland?’
Is there still demand for real estate, what about the commercial property scene and what does the short, medium and long term future hold for the property market across the water?
According to a report from Daft Rental (we’re not making the name up, I promise), rental rates are falling across most of Ireland. There are certain markets where the movement is bucking the trend, but generally speaking, 2008 is seeing falling rental yields in Ireland. This has to do with the fact property prices have risen too far too fast and demand is only so strong. So, where a glut of rental property is on the market and there is only so much demand, there are landlords reaping no returns, landlords having to cut their profit margins and there are those who have bought too high to be making a strong yield even in spite of the fact that they are letting their property out.
This is typically the pattern in a falling market – but never before have so many individual landlords been in the market hoping to profit from buy to let.
On top of these negative factors from Daft Rental, a report has been released from REO (Real Estate Opportunities) who have commented that they have found the investment property landscape in Ireland to be weak in 2008 – only slightly offset by the buying power of the euro.
So, is it all doom and gloom in Ireland? The answer is certainly no – whilst it appears that the supply/demand dynamic has been slightly overshot in the rental market, there is still a strong demand from would-be home owners and what’s more, there is a balanced and healthy real estate market in Ireland – IF you look to the long term. No, there are no (or very few) quick bucks to be made, but if you look at the fact that cities like Dublin have a strong buy to let and commercial property market and you look at the fact that there are pockets of undeniable demand in the holiday rental market in Ireland – this all adds up to opportunity.
On top of this there is the fact that anyone selling now has to be relatively desperate – or at least more than just keen to sell up – which means buyers can talk down a property price and potentially bag themselves a good deal on property in Ireland. Then there is the fact that in the past Ireland, like UK, has seen booming and bust times and that the property market always rebounds.
So, if you want to make money from property in Ireland you can, but you must look to the long term, you must look at where historically demand for rental or resale property (whichever is your investment approach) exists, and you must negotiate very hard and ruthlessly if you’re buying in now. Remember, buyers with cash in their pockets hold all the cards nowadays.