Irish eyes still smiling

THIS time last year Dublin was being heralded as the place to go for investors wary of a shaky looking UK market in their never-ending search for a profit.

A year on, was it a wise move and is there still room in the fair city for further growth despite high prices and falling rents?

Whatever the uncertainty in the UK market, one thing that is certain about Dublin is that no-one is predicting a crash there. Having seen phenomenal growth averaging ten per cent a year for the past few years and a property boom almost like no other, the next 12 months seem set to be just as rosy - well, almost.

"We're predicting price increases of between eight and 10 per cent this year," says John O'Sullivan, residential sales director at agents Lisney.

So far it all sounds fairly promising for the would-be investor, but it has to be said that Dublin is far from cheap.

Command

A typical new-build two-bed apartment in the city centre will set you back somewhere in the region of £310,000 - more if you want en-suite bathrooms and the like - and should be able to command a rent of £900 a month.

Compare that to Manchester where a two bedder in Wimpey City's new Great Northern Tower next to the G-Mex centre will set you back £210,000 and a similar apartment in Crosby's Greenquarter can be yours for £170,000. An average rent for a two-bed city centre flat is between £800 and £900 a month.

From looking at the figures it's easy to see why so many Irish investors have been pouring their money into Manchester. But they are also spending some serious wedge in their own capital too.

"Around 20 per cent of the property in Greater Dublin is owned by investors, and most of them are Irish," says Shane Brady, research analyst at Gunne Residential.

Those who are investing in Dublin now are going into it for the long term. It might not be the cheapest destination on offer, and rents may have fallen from their peak, but there are a few fundamental factors that are keeping the investors interested.

Predicted

Firstly there is the undeniable attraction of the predicted price gains with confidence so high that no ne seems to be able to envisage a time when Dublin property won't make people money.

Why? Shane explains: "It comes down to two main factors - our economy and interest rates. We have had fantastic growth in our economy and the government's policy of trying to attract multi-national companies has really paid off.

"We also have very low interest rates as we are linked to the European Central Bank, which means that people can afford to spend more on things for the same monthly payments."

Another important factor is that Dublin is a very young city, with a third of its population being aged between 25 and 44.

And as it has become one of the most fashionable capitals in Europe so the young professionals have been moving in.

UK investors who want to buy in Ireland can use a range of UK and Irish mortgages, but Benedict Maher, mortgage adviser for Ireland at Conti Financial Services, recommends that for most buy-to-let investors the best option would be take out a euro loan mortgage, not only to take advantage of lower interest rates but also to avoid falling foul of currency fluctuations.

For more information, see the websites below.

Links to other web sites