How Will Brexit Affect the Irish Property Market?
All over Europe, people are wondering how Britain leaving the EU is going to affect them. Here in Ireland, we’re especially concerned seeing as they’re one of our most important trading partners. So let’s look into how the Brexit might affect the Irish property market.
First of all, it’s important to remember that Britain is not leaving the EU immediately. The Brexit is expected to go through in about two years time, and until then, we can’t be sure exactly what kind of effects there will be. However, there is certainly going to be some major consequences as a result of the move, so anyone who currently has investments or is looking to invest in the future would be wise to keep an eye on the situation.
As previously mentioned, the UK is one of Ireland’s most important trading partners – a relationship facilitated by both countries’ membership of the EU. With Britain leaving the trading bloc, this relationship is expected to become strained. This may cause Irish exports to decrease, depressing the economy and resulting in less money circulating in the country. In such circumstances, the housing market would also be expected to struggle, with a falling demand causing prices and rents to shrink.
However, it’s not all doom and gloom. There are some who believe that Ireland may benefit from the Brexit, with multinational corporations deciding to relocate here from the UK in order to stay in the EU. The financial industry is particularly intriguing. London is a hugely significant city in the banking and finance sector, but the Brexit may encourage big banks to seek an alternative hub in the EU. Dublin has been building up its financial sector in recent years, especially in the IFSC in the city centre, so companies may see it as an ideal location for their EU dealings. So how will Brexit affect the Irish Property Market?
In such a circumstance, house prices and rents would be expected to increase significantly, especially in Dublin city centre. Plus, with such wealth circulating in the Irish economy, the housing market would inevitably go from strength to strength in the country as a whole.
Furthermore, if Ireland sees an economic boost as a result of the Brexit, and given that EU citizens would no longer have freedom of movement into the UK, Ireland could experience an increase in immigration. This would inevitably put a greater strain on the housing shortage that already exists in the country, causing prices and rents to rise as a result. If this happened, however, there would surely be a significant increase in the number of houses being built, so its overall effects are difficult to predict.
Indeed, at this point, the effects of the Brexit are almost impossible to call. As well as the issues raised here, there are many more aspects to consider, such as how the Brexit will affect global finances, and what effects that might have on things such as interest rates, with have a huge influence on property markets. At this point, all we can know for sure is that there will be changes. There will be opportunities to benefit from and there is sure to the potential for loss. Investors will just have to stay wise.