Bargains in Emerald Isle

As economic storm clouds swirl relentlessly over Europe, investment vultures are trying to pick the right time to swoop on property bargains.

This means homing in on the PIGS (Portugal, Ireland, Italy, Greece and Spain), with the smart money on the Republic of Ireland.

So says seasoned bargain hunter and investment consultant Paul Burke, whose Irish expatriate clients in Hong Kong are watching the market intently. While it's impossible to call the bottom, Burke believes there are signs showing that the slide has gone far enough. Ireland has experienced its 16th quarter of decline in property prices since the last quarter of 2007. Average prices are 75 per cent down from the peak in the last quarter of 2007.

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.