ancestry and a love for all things Irish. For the fortunate that have been able to walk on the Emerald Isle they leave with a vow to return and take with them many great stories of the Irish scenery, pubs and hospitality.And then there's the very fortunate few that have been able to buy a piece of the island for themselves. Whether it's a sprawling county estate in the most southern tip of Ireland, a thatched roof cottage on the west coast or an apartment in Dublin's fair city, Irish Americans were buying a piece of Ireland at a time with property values turned ordinary Irish citizens into millionaires overnight. When small run down farm houses were being bought up for more money than the average Irish farmer could make in a lifetime and it wasn't just the Americans buying into the Irish charm it was Germans, French and the Swiss too.
However these are the few that may not be so fortunate after all. Recent developments in the Irish property market may have these Irish Americans cringing at their miscalculation as news of Liam Carroll, the largest Irish developer whose companies are reputed to have built more apartments and office buildings in Ireland than any other company may be on the brink of flooding the Irish market with cheap apartments and unfinished office buildings.
Ireland, whose property market has been severely hit by the real estate crises with the values in some areas dropping by as much as 75%, is bracing itself for further declines in values. Mr. Carroll filed for bankruptcy protection after Dutch owned ACC Bank, applied for The Zoe Group to be placed in receivership. Mr. Carroll is indebted to 7 banks to the tune of €1.3 billion euro, with €130 million of it owed to ACC Bank.
The decision by the Irish Supreme Court last week to overturn an earlier ruling for protection is based on the principle that the 3 year survival plan provided by The Zoe Group and independent accountants was hinged on their prediction of the recovery rate of the Irish real estate market, a rate that could not be satisfactorily evidenced. A provisional liquidator has been appointed to two of Mr. Carroll's six companies held under The Zoe Group.Should Mr. Carroll's properties be placed on the market, their current depressed values are estimated to be around €300 million, an amount considerably less that the €1.3 billion owed, the market will then be overflowing with cheap alternative accommodations and office facilities, further reducing the already beleaguered property market. However the Irish governments National Asset Management Agency, who are preparing to start buying up bad bank loans, have indicated that it will consider the long term value of these properties when placing a value on them.
Either way, the Irish real estate market and economy is looking at a long and treacherous road to recovery. Should The Zoe Groups assets be sold at their current value, property values will decline even further. If however, they are sold at values high enough to satisfy their indebtedness then the Irish government and ultimately the Irish taxpayers will pay the price.
With hundreds of acres of property, particularly along the west coast of Ireland being owned by Americans, the effects of Liam Carroll's collapse will be felt by many Irish Americans here too.
Have you ever considered buying property in Ireland and if you did when did you acquire it? Was is during the real estate boom of recent years?
