Huge US interest in Irish property market as prices drop by 68 percent
Connecticut investor has already purchased over $1 million in distressed sales
Auctioneers in Ireland have noted a major increase in the number of inquiries from the United States about Irish properties as prices now stand at 65 percent of what they were during the Celtic Tiger’s peak.
Allsop Space, the auctioneers who will host a property auction in Dublin’s Shelbourne Hotel on May 3rd, said that over the last week there has been a spike in traffic from the United States, with California, New York, and Massachusetts showing the most amount of interest.
As well as the drop in prices, the increase in interest is due to the fact that currently, stamp duty stands at one percent on properties up to €1 million ($1,312,835) and two percent for more expensive properties.
Furthermore, in the latest budget, as an incentive aimed at investors, the Irish government has declared that properties purchased before the end of 2013 will be exempt from Capital Gains Tax for seven years, even if capital values increase.
The auctioneers say one particular US buyer, based in Connecticut, had previously purchased over €1 million of property. The properties have a total income of €30,000 providing a return of 14 percent.
The property that is anticipated to receive the greatest attention from the US is the freehold of Darby O’Gill’s Country House Hotel located in Killarney, Ireland’s most popular holiday destination. The 43-roomed hotel is to be sold at the auction with a maximum reserve price of $676,107 (€515,000).
During the upcoming auction 106 lots are to be sold. They comprise of 42 houses, 38 apartments, and 26 commercial lots. The regional breakdown of these properties is 39 in Dublin and 67 regional lots. A massive 50 percent of the lots are tenanted and income producing.
“This auction will have a broad appeal to a mix of buyers, ranging from owner occupiers to investors, and young professionals to ‘trader-downers’,” said Robert Hoban, Director of Auctions of Allsop Space.
“We think it is a hugely positive sign to see such a large increase in the number of non-distressed private sellers entering the auction, and availing of the open marketplace. Once again, we expect to see healthy interest from overseas, as in previous auctions.”
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