The Worldwide Property Show at the Burlington Hotel last weekend had something for everyone - including this reporter who was offered enough free holidays to keep her going for a while, but with strings attached. The offers came from overseas estate agents keen to show off their properties in situ, but they had to be declined.
So, unfortunately, I will probably never experience Malta "where the sun shines from the heart" and a sliced loaf is only 19p stg and a visit to a private gynaecologist is £15 stg according to the brochure.
About 400 Irish visitors looked into investing in 13 different countries at the show. Like the British in the 1960s, the Irish are turning to foreign property, which can be ridiculously cheap compared to what is on offer at home. A swing round the show revealed that there are basically four types of Irish buyer. First, there are the numbercrunching accountants and investors who may never set foot in their "unspoilt paradises" (within 40 minutes of an airport). They are counting on the needs of the rest of humanity to escape glossy brochure-land once or twice a year and rent the properties from them.
For them, Hungary was promoted by Darragh MacAnthony, who is based in Marbella. Mr MacAnthony wasn't offering any free holidays in his new resort - the place isn't even built yet. But he is promising "serious money" for investors in his development of 80 chalets on Lake Balaton, a "five-star resort" 45 minutes from Budapest. The chalets, with one bedroom to three bedrooms, cost from £49,000 to £100,000.
Germans and Poles are renting villas in the area for $1,000 per week during a 15-week rental season, Mr MacAnthony says. In one season the investor could make $15,000 rental.
With investors whispering about the Spanish property bubble bursting, Mr MacAnthony is hot on Hungary. He believes the strong capital growth being predicted for Hungary when it joins the EU in two years has already been evidenced by the fact that "McDonald's and Tesco's have spent millions there". The next category of investors interested in buying overseas are the retirees looking for a warm, sunny climate in a friendly EU state where their pensions will go farther, where they can play golf, where their grandchildren will want to visit, where the friendly locals speak English and where the health care is free.
Malta, which sees potential retirees as its target market, has from last month reduced stamp duty to five per cent from 17 per cent, although property must exceed Lm30,000 (about £57,000) in value. Free health care and low taxes are another benefit. A married couple bringing £9,600 per year into Malta will have a total tax liability of £120.
Frank Salt, with six offices in Malta and in business for 30 years, has exhibited in Dubai, Hong Kong, Bahrain, Abu Dhabi, Holland, Germany, South Africa and Italy featuring property "with character" for retirees, such as charming converted stone farmhouses from £86,000 and apartments from £56,000. Mortgages are available at 7.25 per cent over 20 years. A new luxury villa with private pool is going for £125,000 and promises, Mr Salt says, a yield of 12 per cent per annum, with eight per cent capital appreciation.
Also aiming at the retirement market is Ken Murphy, a Corkman who insists that Tenerife's warm, dry climate is ideal for people with arthritis. "The Irish like to deal with the Irish", he adds. He and his daughter, Niamh, are offering "lovely two-bedroom villas" at £90,000 in their new scheme, Golf del Sur, which is "like an Irish village in Tenerife".
It boasts a brand-new Irish theme pub (Grandee O'Donnell's), an "excellent steak & fish restaurant", a supermarket, children's playroom, snooker room and two swimming-pools. Nearby, are five "superb" golf courses with two more nearing completion.
Another important category of investors are well-to-do young families, who want to form happy memories in a foreign location, but who also want their investment to mature as smoothly as good wine.
The Vigia Group of Portugal is aiming itself at them with Parque da Floresta, a development at the edge the Costa Vicentina nature reserve in western Algarve, where large villas with swimming-pools are selling from the plans at £250,000. "Imagine a world apart: a dramatic landscape of rolling countryside, long stretches of uncrowded sandy beaches, picturesque fishing villages nestling in rock coves, all bathed in glorious year round sunshine," says the brochure. This should make Parque da Floresta a highly rentable property.
Like many developers, Vigia offers a contract whereby it manages the property. Owners may spend up to six weeks each year (two in high season) at the resort, and rent the property out for the rest of the year.
The last and most enviable category of investors is the filthy rich who simply want to have the finest holiday home that money can buy. For them, there is the exclusive Bayroc beach development, at Nassau in the Bahamas, where luxury apartments cost £500,000 off the plans. "If you've half a million to spare, they are not actually a bad return and very tax friendly, at 2 per cent max," says Tipperary-based agent Diarmaid Condon of IPC Consultants.
Mr Condon, who specialises in properties on the Costa Blanca, is affiliated to the Federation of Overseas Property Developers, Agents and Consultants (FOPDAC). He wasn't offering any free holidays, but did have plenty of good, free advice. Marbella remains the number one investment area for the Irish because of the sea, the warm weather six months of the year, the golf and the free health care for over-65s. Don't expect to go near any property of quality for less than £90,000, he says. Where ever you are considering purchasing, always listen critically to the seller's pitch about capital investments and rental income, Mr Condon advises.
"Talk to people who have dealt with the seller before. If anyone promises more than eight per cent growth, net of taxes, fees and commissions, chances are their figures are inflated. A good rule of thumb is to ask what the gross income is, and cut it in half to guess your net profit."
And curb your optimism, even if you are rolling in cash. Mr Condon recently met an Irish investor who purchased four apartments in Marbella at £250,000 each on 90 per cent mortgages. These properties, which were over-priced, might be worth £250,000 in about 10 years - then again, they might not. But there is no way that the rental income will cover the mortgages, Mr Condon says.
There are no guarantees of rental income in Spain - or anywhere else. Overseas property is a good investment "if proper advice is taken and a purchase made in the right area". Like anything else, the formula is simple: location, location and location. Visit the place and if you want to spend time there, then so will somebody else.
