ConferencesThe high cost of stamp duty and apparent contradictions on the issue emanating from Government were major talking points at the annual conference of the Society of Chartered Surveyors.

"Too much money chasing property" was the title chosen for this year's event which took place last Friday at the Four Seasons Hotel, Ballsbridge, Dublin. The half-day conference touched on a wide range of issues relating to property investment.

Affordability of property was one of the main concerns facing investors and potential owners, said the society's president, Conor Hogan, a director of Joseph C Hogan & Sons Chartered Quantity Surveyors. "Stamp duty is at the core of this issue with current Government indecision adversely affecting the market. Stamp duty is a distortion of the market price, despite what some ministers say."

Not only did it distort the housing market but it particularly distorted the commercial property market, Hogan said. "It forces investors to look abroad where transaction costs are lower," he told the 300 delegates. "The Government needs to send a clear message, as only on Wednesday morning last Noel Ahern TD, the Minister of State for housing, stated on Morning Ireland that stamp duty 'has been adjusted before and will be again'. The message they are sending is confused."

This had an impact on consumers, he said. "People will postpone making a purchase decision where there is indecision by those in charge."

On market conditions, Hogan said he remained confident in the strength of the market despite the recent failure of some properties to sell at auction. "I believe that the residential market is still reasonably strong. There is no collapse in the residential sector that I am aware of. There is no panic. There is just a slow down or levelling in the growth of prices achieved."

The housing construction sector was expected to deliver 90,000 units before the end of the year, said Hogan. "The main concern is affordability, especially with the recent rise in interest rates."

Hogan was even more bullish about the commercial, retail and industrial property sectors, citing figures from the SCS/Bank of Scotland/DIT Bolton Street survey published last September. It measures market sentiment and forecasts a growth in capital values and an uplift in rents, he stated.

The head of tax financial services and real estate at PricewaterhouseCoopers Ireland, Enda Faughnan, raised the question of how much risk investors would tolerate. The risk factor had increased as investors sought higher returns at home and investments abroad, he believed. "Property investors are taking on significantly increased risks as they diversify in search of higher rental yields and capital gains," he stated.

On the home market this meant they were taking more risks with planning permissions and development as a way to reduce costs. They were also willing to put up more of their own money, both to cut finance costs, but also as lenders began to tighten up their lending policies.

"The greatest risks though are being encountered when investors move abroad in search of richer pickings. Clearly there may be greater rewards in far away fields but the risks increase significantly also," Faughnan said.

This related to the unfamiliarity with foreign markets and a different local "mindset". Difficulties were also found in the different tax and legal systems, cultures and currencies. "These risks can certainly be managed but only through proper due diligence and structuring before the acquisition is made," he added.

The research director at CB Richard Ellis, Marie Hunt, looked at the reasons behind the surge in property investment. This reached an astonishing €9 billion last year, with only €2 billion or 22 per cent invested in Ireland.

Of the total, 70 per cent of the money came from private investors with institutions making up the remainder.

Our greater personal wealth, fuelled by the success of the Celtic Tiger, provided the resources to move towards property investment, said Hunt. This in turn was matched by our desire to own property. "Irish investors have a natural affinity with property," said Hunt.

"Whereas US investors tend to be naturally attracted to shares and equities, Irish investors have a strong preference for property."