Horrible statistics abound. One third of households are in negative equity, as are one half of buy-to-lets, creating a vast pool of people forced to stay put or realise a loss. In addition, 10 per cent of mortgages are more than 90 days in arrears and a large number of these have more than one loan against them.

Banks are heavily restricting new lending and weak domestic demand is intensified by this glut of oversupply. More than 250,000 new houses stand empty. Half-finished housing estates litter the landscape, silent monuments to greed and feckless bank lending during a boom. It's not surprising that domestic confidence and demand is at an all-time low and emigration has raised its head again.

The one bright spot is land prices. Having tumbled between 2007 and last year, they showed signs of recovery in the second half of last year and into this year. Land is to the Irish what gold is to the Chinese, and Burke believes that after the banking system collapsed, home investors now see land as a safer haven than the bank. Nevertheless, the spectacular fall in land prices left house prices in many areas below the cost of construction and replacement.

So why Ireland and why now? An example of how things stand is a country house in the northern county of Donegal in the Irish republic. Sold five years ago for Euro150,000 (HK$1.45 million), it was sold by auctioneers Allsop last month for Euro44,000, having gone on the market with a reserve of just Euro30,000.

So how does a prospective investor go about researching the Irish market? Websites, word of mouth and reliable agents are the best bet. Ireland has no land data base and transaction figures are not freely available as in Hong Kong. So it's a mater of studying the auction results, advises Burke, adding that this only gives a limited snapshot as many of the prime properties will not be auctioned, but sold by private treaty through agents.

There are fledgling signs that confidence is returning, but as ever, timing is everything. 'I see a lot of interest and sales at auction have been positive,' says Burke.

Allsop's next auction will be on July 6. Overseas bidders can take part online live after sending 10 per cent of the maximum they are prepared to bid in advance. Property conveyancing is similar to the UK and online buyers who register with Allsop can view legal documents before bidding.

Burke has studied the sales patterns and notes that while distressed properties dominated at first, that's no longer the case. A third of the property in recent sales has been offered by private vendors, not banks. And vendors are not just testing sentiment - they are there to sell. 'Of 200 properties, less than half a dozen didn't sell last time,' says Burke. While he was looking for a bargain in the provinces, a Chinese buyer would find prime property in the capital, Dublin, a better bet.

Investor information from a rental report of Daft.ie, a property website, shows snapshots of gross rental yield for the first quarter of this year. Taking prime south side Dublin, the average annual gross rental yield is 6.2 per cent, up 1.4 per cent year on year. Best performing are two-bedroom flats, yielding 6.8 per cent, up 1.1 per cent. Burke says Dublin city centre yields are higher, averaging 7.5 per cent. Three-bedroom flats perform slightly lower at 6.2 per cent, up 1 per cent on the year. A two-bedroom flat in desirable Dublin 2 and 4 postal districts can be bought for Euro260,000 to Euro300,000 and rents for Euro1,200 to Euro1,400 per month. A two-bedroom city centre flat would rent for Euro1,000 to Euro1,400.

'Capital cities are always the best bet and student lets are strong in Dublin too, with so many universities and colleges. With a high number of Chinese students in Ireland (the highest of any country in Europe), a Chinese buyer might prefer to buy somewhere for his student children to stay, rather than paying high rents. The yuan has appreciated 14 per cent against the euro in the last year so it's a good bet. '

With no national database, researching Irish property can be tricky, says Burke. 'That's why the new landlord tax is a flat Euro100 - the same whether your property is a shoebox or a mansion.' But all the big agents are there, from Savills to Jones Lang La Salle and Knight Frank, so there's no shortage of places to go for advice. Sherry Fitzgerald is a good local Irish agent. Browse through website MyHome.ie for details of thousands of properties on the market.

Why should Asian investors consider buying Irish property? 'Ireland is finally reappearing on the map,' says Burke. 'After the well-publicised visit of Vice-President Xi Jinping - he was f?ted in Ireland - the country is positioning itself as a gateway for Chinese money going into Europe.' A low corporation tax of 12 per cent is among the lowest in Europe.

So is it time to take the plunge? 'Asians are always interested when prices seem at an historic low. If you've got your eye on a property in a good area, pick it up. But there is no sign of solid growth yet. The correction may be overstated relative to the value of property, but your buyer base is still limited due to oversupply, negative equity and poor consumer confidence. Don't expect a fast turnaround.'

Economic outlook

The Irish economy grew by 0.7 per cent last year, the first year of growth since 2007. Gross domestic product growth of 0.5 to 1 per cent is forecast for this year.

Due to the small, open nature of the Irish economy, there is a close interdependency between its performance and that of its main trading partners, namely the UK, euro zone and the US. 'This is evident from the slowdown that was recorded in the second half of 2011,' says property agent Savills. The International Monetary Fund forecasts that Irish GDP will rise by 0.5 per cent this year. The Irish government predicts 1 per cent, and possibly 2 per cent next year.

Factors supporting a recovery are the government's attractive corporate tax rate of 12.5 per cent and its commitment to cleaning up the country's finances. Savills says these elements support the export sector which is driving a gradual recovery in economic output. An increase in competitiveness is also supporting a recovery, and Ireland continues to attract foreign direct investments, with Google, Facebook, LinkedIn and PayPal in expansion mode. Unemployment is set to fall from 14 per cent to 13.7 per cent next year.

Investment Property

Activity in the investment market has been stagnant for four years. '2011 looks to have been the worst year in the cycle, with total investment turnover only Euro25 million [HK$243 million],' says Fergus O'Farrell, director of investment for Savills Ireland.

Market conditions have improved with a government package for the property market, announced in last December's budget. This includes a reduction in stamp duty from 6 per cent to 2 per cent, capital gains tax relief for investors who hold commercial assets bought before the end of this year for seven years, and no change to existing upward-only rent review contracts.

'Apart from the significance of these measures, international investors see the budget package as a commitment from the government to get the property market moving again,' says Savills. This coupled with other factors, such as historically high initial yields, are making commercial property investment in Ireland more attractive.'

Official figures show that Irish commercial property last year returned minus 2.4 per cent year on year, the fourth consecutive negative annual return. The decline followed 10 per cent income return and minus 11.4 per cent capital growth. Continued falls in capital values were driven by a combination of a decline in rental value and an expansion in yields. However total returns on a quarterly basis showed an increase of 2.8 per cent between the third and fourth quarters of last year.

Last year saw demand for office space perk up after sliding since 2009. Prime rents in Dublin stabilised in 2010 at close to Euro350 per square metre per year, but the competitive nature of the market saw prime rents drop to between Euro290 to Euro210 per square metre at the end of the first quarter this year.

'Take-up in the office market in 2011 was 25 per cent higher than in 2010.

'The level of interest in Dublin from international telecoms, media and technology companies increased in 2011 and is a reflection of the very significant improvement in competitiveness that has taken place in the Irish economy.

Part of this is due to the significant reduction in office rents, particularly for prime space. These factors, along with a highly skilled workforce with English as the main business language, will continue to make Ireland and Dublin in particular, a very attractive location for US multimedia,' says Savills.

Tax regime

Non-residents are taxed on income arising from Irish sources only. They are considered resident for tax if they spend at least 183 days there, or if their main residence is in Ireland. They must file a tax return detailing worldwide income in their tax resident home country. Where a double tax deal exists between Ireland and the home country, which provides for double taxation relief, then a deduction for tax paid in the foreign country can be offset against tax on the same income in their home country.

Stamp duty is charged on purchasing Irish property at rates of up to 2 per cent, depending on value and whether you are an owner-occupier. Non owner-occupiers/investors with an Irish property valued at less than Euro127,000 (HK$1.23 million) are exempt from stamp duty.

Capital gains tax is charged on sales of Irish property at 20 per cent of the actual gain. Irish income tax is charged on rents and income at rates varying from 20 to 41 per cent, depending on the level of net income. Non-resident landlords must pay income tax on their Irish property rents. If a non-resident landlord receives rent directly from his tenant, the tenant must deduct tax from the gross rent with the Revenue at a standard rate of 20 per cent. Failure to do so leaves the tenant liable to pay the tax. The landlord then claims this amount as credit on their annual tax return. If an absent landlord employs an agent to manage his property, the agent collects the rent gross and handles the tax. Alternatively, an overseas landlord can handle the tax themselves, by registering for tax in Ireland and submitting an annual tax return, with allowances claimable for rental costs, such as mortgage interest, against gross rents.

Ireland also has an annual non-principal private residence tax, due on any property not occupied by the owner. It is Euro200 for this year. Another recent addition is a Euro100 landlord tax.