Irresponsible Commentary on Overseas Property

Don't worry......the overseas governments are no fools.......they like us can tweak their tax laws to bring in the investors money and then tax it to the hilt as time goes on
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I know what you mean - the problem may lie with who exactly that particular government's paymasters are as it may be the payer who sets the agenda.
Anyway, I know this aint the place for this discussion so I'll leave it there (that place will be after my 5th pint tomorrow night (and as for the moral implications of binge drinking and worse during the lenten season;) )- it's been a mad week!!).
 
I've watched this thread with interest and there has been a lot of sense spoken and the most recent comments, on the local governments stepping in, is an issue that is beginning to come to the fore in a number of markets, especially here in Croatia. There are simple rules of how and when to buy, not before seeing the property, not before getting a feel for the place, not before seeing the ups and downs of buying the place - this especially goes for those wishing to relocate or spend more than a 2 week holiday each year.

Rental returns are never certain and only a 3-card trick merchant will try sell guaranteed yields - esp. in the cases of Dubai, Croatia and Turkey (witnessed 1st hand).

Also learning a bit about the country in advance helps immensely, as well as asking "tricky" questions about the place when you're planning to go or are there. How else would you be able to read between the lines when you hear somebody tell you, with complete sincerity - mostly - that the government will no longer allow foreigners to buy, only to hold their property as concessions. Or when "professional" agents tell you that you cannot buy as an individual but only as a Limited company. It happens all the time and unfortunately it's not going to be helped unless more people are open and frank in forums like this and not embarassed by needing to learn.

I know my colleagues have found it a problem when folks from away land in and are totally misinformed and end up in a daze not knowing who or what to believe.

If you want to buy abroad, do so by doing your homework, not only on the property market, but on culture, politics etc and ask all the questions before you head out!
 
I also have followed this thread with interest
I must state I have some conflict of interest as I do provide proeprty investment advice
But I do not provide investment advice on properties outside of Ireland

I think there should be a distinction between investing in property in an overseas location and the popular "keep up with the Jones' " concept of "overseas investment"

You must have done all the relevant and irrelevant research before investing in property, whether it is down the road or around the world

I believe, but don't want to speak for him, that Brendan was referring to the idea that people asssume that all small economies are going to perform like Ireland's has for the past 12 years and that there are 20 property booms in the offing all over Europe
And that if you are not in you will lose out

This probably is speculation and/or gambling

On the other hand there is nothing wrong, I believe, in investing in a country that is not not your country of residence
Providing that all, as I stated above, relevant and irrelevant research is done to the correct level

Simply, if you were to buy and investment property 2 miles from your home
a) Would you go and look at it?
b) Would you get a structural survey?
c) Would you get quotes for any work required?
d) Would you research (yourself) what rental income you can expect?
e) How will any income be taxed?
f) What other taxes are going to be due?
g) What otehr obligations will I have as a landlord?
h) ......

If you would do all this for that property, why would you do any less for a property that is going to be even more difficult to look after is there are any problems?

When people purchase proprety without following these steps then they are speculating/gambling on a property whether it is here or abroad?

stuart@buyingtolet.ie
 
Thank you for putting what I was tryign to say in a structured manner Stuart:) Doing homework, and reading through/past the propaganda is essential.

So many people land in a place with a certain concept in mind and anything else seems alien. So many end up disappointed as they find that the local levels of workmanship is "not what we expected", well guess what, this stone house was built in 1901, survived 4 major wars and the reason it's so cheap is because it needs to be completely overhauled! Okay, I know my colleagues wouldn't snap in that manner, but sometimes it might not hurt!

One of the sweetest places that should be the real pearl of the Adriatic is.....Albania. Beautiful countryside, golden sandy beaches, plenty of skilled, cheap and willing labour, but it's not even advisable to go for holidays (there are military curfews in place in a number of cities and towns). Then go up the road to Montenegro where there is a civil war bubbling, problems with ownership and a massively discontented populace, ditto with Bosnia, but yet there are those willing to speculate, even buy off plans, with the view to cashing in on some expected boom. My only hope is that boom doesn't come from artillery in the hills above!!
 
It's very funny, unless you've sunk your savings into a place in Dubrovnik! Apart from being an immensely boring place, it's still a bone of contention for all those former residents who were "cleansed" by Croatians, plus it's cut off by a little strip of Bosnia from the rest of us.

But I suppose it's human nature, I can't remember from 2nd Year Geography in UCD the exact numbers as I was too busy trying to figure out why of the world's population living in danger zones (natural or human made). I think it's well over 60%!

Although one place of interest, Jordan, has seen the price of land on the borders with Iraq and Israel leap in the past 3 years, I wonder why?
 
I have investede in Malta. They are English speaking, friendly and the Maltese people are a nation who cannot do enough for you. It is only a 3.5 hour flight. They have just joined the EU and have a huge tourist industry. At the moment there is some quite cheap proerty. The gamble is that the capital gains tax rate is 35%. I think the EU will make them bring this down but maybe I am being too optimistic.
 
Qawra said:
I have investede in Malta. They are English speaking, friendly and the Maltese people are a nation who cannot do enough for you. It is only a 3.5 hour flight. They have just joined the EU and have a huge tourist industry. At the moment there is some quite cheap proerty. The gamble is that the capital gains tax rate is 35%. I think the EU will make them bring this down but maybe I am being too optimistic.
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Lets hope the EU never gets to setting taxes or else we'll see much higher tax rates in Ireland. So I hope for your sake that the lowering of CGT in Malta is not solely reliant on the EU but then 35% is not that high anyway.

After some consideration I stayed out of foreign property investment because I just couldn't help wondering how we in Ireland would have felt if, in the pre-boom 80s, a swarm of Japanese investors had pushed up Irish property prices and become our landlords.

Speaking to friends who have invested it seems their decision is based on ''what happened here will happen there''. But the EU is a very different place, Germany and France are very different economies and the social background to the new member states is vastly different to that of Ireland in the 70s and 80s. There is very little willingness fom the governments of 'old Europe' to hand money over to the 'new Europe' who is perceived as a threat to investment and jobs.

I think the gamble is more that just the 35% CGT.
 
askalot said:
Speaking to friends who have invested it seems their decision is based on ''what happened here will happen there''. But the EU is a very different place, Germany and France are very different economies and the social background to the new member states is vastly different to that of Ireland in the 70s and 80s.
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I very much agree with askalot, countries like germany, france, austria, denmark, luxemburg and to lesser extent italy have had stable wealthy economies for many decades and are very very different to ireland in 70s/80s. There is also a substantial between them and ireland now in that theyve had many decades (even centuries in some cases) to invest their wealth in their infrastructure.

Investing in properties abroad, based on the irish model ''what happened here will happen there'' or "property is the only way to make a good profit" (which is what I hear at home) is in my opinion a dangerous game.
 
35% is the same as here in Croatia, but it's avoided once the 3 year ownership window closes.

I think in Malta the market is pretty good as there are 400,000 people living there and a real pressure on land. I don't know if this was true, I was told it at the St. Patrick's Day do here yesterday afternoon, that peope can only own 1 house in Malta. Sounds a bit draconian, and I'm sure there's ways around it, but that could be a model that if adopted in Ireland would shock a heck of a lot of folks! What would happen to ranelagh, Rathmines and Phibsborough?
 
A timely comment from the IAIM. (This was also on the RTE News @9 last night altho I didnt see it).

I also find something else about this article very interesting. The article (quite correctly & responsibly) asks the IAIM to concede that they have a vested interest in Irish People investing their money elsewhere.

However when have you ever seen the Irish Media, when e.g. interviewing an "economist" with an Estate Agent or a Mortgage Bank, ask them to concede that they have a vested interest in talking up the property market..? Double standards indeed.

The Irish Times said:
Investment managers warn of overseas property mania
Laura Slattery
Vulnerable Irish consumers are being swept up in a mania of overseas property buying despite a complete lack of regulation or advertising standards in the industry, the Irish Association of Investment Managers (IAIM) warned yesterday. The IAIM says the advertising of exorbitant and supposedly guaranteed rates of return without qualification or disclosure is becoming a regular feature of advertisements by overseas property vendors.

It has written to Minister for Justice Michael McDowell to urge him to introduce regulation in the area.
There are no statistics on how much Irish people are investing in overseas property. However, the number of exhibitions, seminars and advertisements has grown in recent years and it is expected that more money will flow overseas once Special Savings Incentive Accounts (SSIAs) start to mature.
"In terms of a mania, it's almost reminiscent of the stock markets in the late 1990s," said Gary Connolly, chairman of the IAIM's retail funds committee.
Mr Connolly admitted that the IAIM, which represents investment fund managers, has a vested interest in dissuading people from investing in property and persuading them to place their money in equity-linked products instead.
The IAIM believes a code of practice should apply to the sale of all property similar to that which the Irish Financial Services Regulatory Authority applies to the sale of other investments. Any regulation should cover the disclosure of commissions paid to agents, it said.
Last year's report by the Auctioneering and Estate Agency Review Group recommended that a new regulator for domestic auctioneers and estate agents should also cover overseas property vendors. But this regulator is not expected to be up and running for at least two years - too late to protect SSIA holders who use their money to buy overseas.
A few Irish companies selling overseas property are members of the UK-based Federation of Overseas Property Developers, Agents and Consultants (Fopdac).
Noreen Hynes, chief executive of Dublin overseas property firm Aquarius Properties, said Fopdac rigorously vetted all of its members and offered assurance to consumers through its code of ethics and complaints procedure.
Ann Fitzgerald, the IAIM's secretary general and the head of the new National Consumer Agency, said people needed real information. "Anecdotally, it is said there are three prices for overseas property: the price for domestic buyers, the price for the overseas investor and the price for the Paddies," she said.

© The Irish Times
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soma said:
A timely comment from the IAIM. (This was also on the RTE News @9 last night altho I didnt see it).

I also find something else about this article very interesting. The article (quite correctly & responsibly) asks the IAIM to concede that they have a vested interest in Irish People investing their money elsewhere.

However when have you ever seen the Irish Media, when e.g. interviewing an "economist" with an Estate Agent or a Mortgage Bank, ask them to concede that they have a vested interest in talking up the property market..? Double standards indeed.
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exactly.
most newspapers are making a fortune from property adverts/supplements. why dont you write a letter to the paper for its letters page outlining this hypocrisy.
 
I reckon you would be wasting your time, unless of course you are placing 40+ pages of ads each week with them. They know better than to bite the hand that feeds.
 
What a load of tosh, sorry for the language, but the so-called "spokesperson" for FOPDAC, their own company get local agents (I know for here) to find property for them and their clients, and the done thing is to stick on mid to high 4 figures for the local agent on top of the commission they're getting anyway! This supposed association of agents and developers are so minimal it's not funny. The price for paddies is very disingenuous and anywhere you go there is a local price and a "western" price normally in operation when the local agents are unlicenced or registered, yet a fopdac member allowed it's clients to put down a deposit and sign contracts for an obviously fradulent construction only last May....hmm, rigorously vetted indeed.

When something like this appears in a newspaper it is usually because the folks mentioned in it are going to be on an earner and have paid for the publicity, soma and bearishbull yu've hit the nail on the head!
 
soma said:
However when have you ever seen the Irish Media, when e.g. interviewing an "economist" with an Estate Agent or a Mortgage Bank, ask them to concede that they have a vested interest in talking up the property market..? Double standards indeed.
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Because as dumb as many people think the Irish public may be, most people will associate property related comments from an estate agent or a mortgage provider as being something to do with their own companys business.

However, comments from an organisation called IAIM (whom most people probably would never have heard of) about anything would probably have had to be qualified.

The touchiness of the coverage of foreign property purchasing from those new posters on this site who advocate such a practice si most amusing to me.

Just a question to those people. Would you welcome such regulation of such an activity as suggested by the IAIM? (Leaving aside the how's and the wherefore's as these can always be looked at later).

Regulation of Irish people taking their money out of the country to purchase foreign property? Yes or No?
 
ronan_d_john said:
Because as dumb as many people think the Irish public may be, most people will associate property related comments from an estate agent or a mortgage provider as being something to do with their own companys business.

However, comments from an organisation called IAIM (whom most people probably would never have heard of) about anything would probably have had to be qualified.

The touchiness of the coverage of foreign property purchasing from those new posters on this site who advocate such a practice si most amusing to me.

Just a question to those people. Would you welcome such regulation of such an activity as suggested by the IAIM? (Leaving aside the how's and the wherefore's as these can always be looked at later).

Regulation of Irish people taking their money out of the country to purchase foreign property? Yes or No?
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regulation of advertisements and the agencies selling in irish market yes,obviously no one wants to stop free movement of an individauls capital.
 
bearishbull said:
regulation of advertisements and the agencies selling in irish market yes,obviously no one wants to stop free movement of an individauls capital.
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Agreed, as there is no reliable way to distinguish money leaving for foreign property purchases this could not be done other than by re-introducing some form of exchange controls which is probably not possible even if we wanted now we are in the Euro.
 
While it's probably not possible as stated in the above post to put restrictions of money out of the country for foreign purchases, some responsibility on behalf of the agencies/companies selling in Ireland would be a massive start. Very very few of the companies selling in Ireland (from Turkey to USA to Croatia) have actual offices on the ground in their destinations and fewer still have more than limited actual knowledge of the markets in which they are selling. Many of the places on offer have zero (if any) regulation on property agent operations and this is a huge danger. I've seen it happen 1st hand where non-nationals were in the process of buying here and all of a sudden the "agent" no longer returns calls or emails and their deposit (best case) or property (worst) is simply paper in the wind.
 
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