Ireland’s Overseas Property Boom

Ireland’s Overseas Property Boom

CROATIA is the new Courtown for the increasingly affluent Irish holidaymaker and investor. As property prices continue to rise at home, foreign shores look increasingly attractive and offer greater value. At the same time, agents keen to get a cut of the action are employing more sophisticated marketing techniques. Investment shows and overseas buying trips are now the norm as agents scramble to capitalise on the boom.

Estate agents estimate that more than 60,000 Irish people have purchased in excess of €6 billion of residential property abroad since the mid-1990s. Two-thirds of that amount is believed to be invested in Spain alone. Figures recently released by the Central Statistics Office indicate that Irish investors spent in the region of €250m acquiring overseas residential property in the first quarter of 2004, although that figure excludes UK investment and purchases financed by foreign banks.

“In a few years’ time, having an overseas property will be as common as having a DVD player. Pretty much everyone will own one,”

said Maura Byrne, the managing director of Azur Assistance Ireland, an overseas property consultancy. That may be an overstatement but there is no arguing with Byrne’s claim that the overseas market is extremely buoyant and will continue to grow.

“Buying a second home in Ireland has become too expensive for most people,”

she added. A recent survey carried out at a property exhibition confirmed the scale of intentions when it came to purchasing overseas. The majority of respondents planned to spend up to €200,000 and the favoured locations were Spain, France, Portugal, Bulgaria, Hungary, the Czech Republic and Croatia.

Selling overseas property to Irish investors used to be so easy that few developers had to look beyond the tried-and-trusted method of flogging their wares off the plans from a rented hotel room. The recent proliferation of competitors has forced the industry to rethink its marketing approach.

The most obvious marketing trend at the moment is the abundance of large-scale exhibitions happening all over the place,”

said Byrne, whose company specialises in selling property located in “old Europe”, especially France.

“The number of these shows has dramatically increased.”

Over the Easter weekend RTE’s House Hunters in the Sun exhibition will open at the RDS Simmonscourt. Destinations featured include Spain, Portugal, Italy, Bulgaria, Greece, France, Dubai and the Bahamas. There will be 22 different 30-minute seminars with property, law and tax experts held each day.

Last month 3,000 would-be investors headed for Dublin’s Citywest hotel for the Investment Property exhibition, organised by SDL Exhibitions. The show attracted agencies offering properties in more than 30 countries.

Not all overseas property companies are enamoured with this marketing approach. Finbarr Callaly, a director of France Residence, which specialises in residential properties for well-heeled investors, said: “They are like bazaars and they flood the attendees with too much information.

“There is quite a lot of mis-selling. Some of the companies at these shows would sell you anything and, in the long term, this creates problems. It’s not like people are buying a tin of beans.”

Callaly said that from a cost perspective, large exhibitions are not worth it for his company’s specialised market. “The big exhibitions just lump everyone in together.”

The Viva Espana property exhibition held at the RDS last November which described itself as ‘a property and lifestyle show’ – was, according to some exhibitors, a disappointing affair that failed to attract big numbers. Many commentators said it was an indication that the Spanish market is on the wane at the expense of eastern Europe.

A growing number of companies are now holding their own private shows in order to avoid the confusion of the large events. “We find that private shows work best for our company. We’ve been doing them for four or five years now and we’ll be doing many more in future,” said Byrne.

Callaly’s France Residence also conducts several private shows each year. “These would feature an exclusive product. Typically, we have a seminar in a hotel, sometimes combined with the launch of a new development,” he said.

The company supports its private shows with targeted direct mail shots and also relies heavily on its website.

“People are more knowledgeable than before. Many people will often have specific questions when they come to you. They will usually have done extensive online research beforehand,”

said Callaly. He says that 30% of the people who attend their private shows are repeat clients or referrals from existing clients.

The company also attracts syndicates of professional investors. “For those, we market differently. You wouldn’t see the properties displayed on the website,” he said.Noreen Hynes, the managing director of Aquarius Properties, which markets homes in Spain, Portugal, Italy, eastern Europe and America, said:

“People nowadays want more information. They will have done some research and when they come to you they want professionalism and integrity. They don’t want bull and misinformation.”

Hynes stressed the importance of relationship marketing when selling overseas property.

“Face to face is the only way to communicate. Clients will want to build a relationship with you in case they want to buy again at a later stage.”

She predicts that, in the future, people will be able to ring up their “friendly, local property adviser’ in much the same way as they would currently ring their stockbroker. “They will be able to say, “I have €50,000 to invest. What have you got for me? Aquarius advertises its properties in newspapers and on the radio.

“We find this effective because it gets people to look at our website. The site is really important to our business. We’ve had it up and running from day one,”

said Hynes. In addition to the usual selection of property profiles and a drive to get viewers to sign up for a monthly newsletter, the site also offers potential buyers the chance to book subsidised viewing trips abroad. “Viewing trips have always been around, but the days have gone when you could just send a bus load of people to look at different properties,” she said.

“Investors want to be made to feel special. We make individual arrangements for people and they will be met abroad by an agent who will they know exactly what they want.”

France Residence will only organise a viewing trip if the client requests to be flown out to see a particular property. “I think that subsidised viewing trips are a cynical sales device. We prefer no-pressure sales,” said Callaly.

Hynes said: “Clients are not fools. To treat them as such would be wrong. You have to work with them.”

Callaly again warned against overagressive marketing techniques. “It will be interesting to see people’s reactions if the big promises made about the emerging markets such as eastern Europe fail to materialise,” said Callaly. “If the returns aren’t there, they may recoil back to traditional markets.”

“Some brokers sell the property instead of the investment, but we believe that we are marketing a financial product, and not just a piece of property.”

- From the Sunday Times