Irish real estate values are now half of their Celtic Tiger highs. But, until recently, the pricing collapse did not mean it was a buyer’s market.
In most cases, asking prices were still at their peak levels. Sales were slack, but it was generally accepted that the sales taking place were for far less than asking prices. However, you can only speculate about prices because Ireland (like most of the world outside the United States) has no multiple listing service (MLS), making it nearly impossible to get a handle on what a piece of property “should” cost or has, in fact, sold for.
Now, buyers in the market are in a far better position, for two reasons:
First, the introduction of the residential property price register in 2011 means you can go online, select a county of interest for your chosen period (from the last three years) and you are presented a record of all local sales, along with the actual selling price in each case. It isn’t quite an MLS, but it makes for a whole lot less guesswork.
The second change affecting this market in a big way is Ireland's new property tax, which was rolled out this year. Back in the days of the Celtic Tiger, everyone proudly watched (and bragged about) their home values climbing to ridiculous levels. Now it’s in everybody's interest to keep values down, thus minimizing annual tax bills.
All of this has helped restore some normality in the market. The asking prices you see in agents’ windows and on websites today are far closer to reality. Most of these are around half the asking prices you saw six years ago, and I'd say you still have some bargaining power from there.
Distressed property is still going under the hammer once a quarter at the Shelbourne Hotel in Dublin. Managed by the UK group Allsop Space, the catalogs are mostly filled with new buildings in half-occupied developments, homes by developers who ran into financial difficulty, investment apartments and commercial properties. In other words, you won't come across too many traditional or character properties. Still, it can be worth keeping an eye on these auctions. Past results and upcoming auction details can be seen at the Allsop website.
Be careful, though, not to be influenced by what a property may have been on the market for five years ago. An agent may tell you that the 260,000-euro, five-bedroom property on one acre in a stunning location overlooking the sea has been dramatically reduced from 600,000 euro. That first price was severely inflated. What the owner is now accepting is far closer to the “real” price.
If you decide to buy a home on the Emerald Isle, how much will you owe in property tax? That depends on the bracket your property value falls within on the property tax schedule. There are 20 brackets on the table, with corresponding fixed charges. The lowest amount payable is 90 euro for property valued at less than 100,000 euro. A property worth 500,000 euro will be subject to 855 euro annually. If your home is worth more than 1 million euro, you'll pay 0.18 percent tax on the first million and 0.25 percent on the balance.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, How To Buy Real Estate Overseas, published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.