Fear of flying since September 11th has had a dampening effect on the overseas homes market. People are no longer so quick to hop on a plane and head off to the sun, and many agents report that almost-in-the-bag sales have fallen apart at the last hurdle with clients deferring decisions until the international situation becomes more stable.
Gwen Hourigan of Holiday Homes Abroad said: "There are still people going down to Spain on inspection tours, but the level of general enquiries is down. We're still receiving 10 calls a day from people looking for information about buying foreign properties. Florida has been worst affected. There's nothing happening in that market at present, most people that had scheduled trips to view properties have since cancelled or deferred the trip until the new year. A lot of people are adopting a wait-and-see approach," she explained.
Rising property prices in Marbella and Puerto Banus in the south of Spain have also had a subduing effect on the market. Marbella's fabulous climate and cosmopolitan atmosphere have made it a firm favourite with both investors and buyers looking for a holiday home, but property prices have increased by 20 to 30 per cent over the last year and are set to continue rising, said Bernie Ennis of World Homes and Investments.
"Marbella prices are now at their peak, investors are looking for other locations that can provide better value. It's a much sought after destination for Northern Europeans and property there is very expensive at the moment so it's no longer an investors' paradise," said Ennis. This has resulted in a considerable fall-off in demand from the Irish market, but holiday home seekers are still requesting Marbella.
Two-bedroom apartments start from around £200,000 (€253,947) in this area, or from £250,000 (€317,434) in the seafront areas. "The range of properties in both new developments and resales, along with high capital appreciation are probably the main reasons for the area's popularity. The Costa Blanca area is cheaper with apartments still starting from £60,000 (€76,184) upwards," said Hourigan.
A growing number of Irish buyers are now eyeing up opportunities in France, in particular the south of France where there is still good value to be had. According to Ennis one-bed apartments start from as low as £80,000 (€101,579).
And it's not just European locations in demand. As the Irish develop more sophisticated and exotic tastes, villas in Barbados and other Caribbean island locations are the latest must-have properties, with others preferring to add a London, Paris or New York apartment to their collection.
The trend for more exclusive sun locations in the Caribbean was started by business trio Dermot Desmond, John Magnier and J P McManus when they acquired the luxurious Sandy Lane resort in Barbados, where sites are now available from upwards of $3 million. Meanwhile Denis O'Brien's Quinta da Lago development on the Algarve is still a popular choice for Irish buyers, most of whom invest upwards of £500,000 (€634,869) on modern villas with swimming-pools in good locations.
Eastern European property is also in demand. Budapest, Prague and Poland have become popular locations with Irish property investors. Residential properties are relatively cheap in these emerging cities and Irish agents report that they are receiving more and more enquiries from purchasers looking to acquire apartment buildings in good central locations.
While property prices are still relatively cheap, the demand from new corporate tenants and ex-pats for good rental accommodation means that investors can see good returns. For the price of a family home in the suburbs of south Dublin, purchasers can get a 12-apartment block in the centre of Budapest. Ed Hughes at the Lexxus estate agency in Prague says that he deals with increasing numbers of Irish investors and developers seeking opportunities in the Czech Republic.
Spurred on by decreasing opportunities in the Irish market following the introduction of prohibitive tax levies as recommended by the third Bacon report, Irish people looked for property opportunities on foreign shores. What followed was a mad frenzy of snapping up villas and apartments in Spanish resorts. Two years on, the overseas market still continues to be very buoyant in Ireland. France, Spain, the Canary Islands, Portugal, Florida and Greece are the most popular locations for Irish buyers.
