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It has been over a year since Ireland learned of the UK’s profound decision to leave the European Union after 43 years of membership. At the time UK Prime Minister David Cameron made the decision of giving it sometime before the formal exit is triggered which has allowed a lot of speculation as to what this means for us, Ireland their closest neighbour. In terms of the property market in Ireland which has largely returned to a more stable footing following the recession. Now we face the uncertainly of Brexit and what that may mean to the property market.
The current situation of the property market in Ireland has seen an increase in recent times with 8% suspected growth in 2017 due to the launch of the help-to-buy scheme, looser mortgage lending rules and lack of supply leading to price growth across the country. So what impact will Brexit have on the following areas we will touch briefly on?
Relocation of Business
There has been a lot of talk about the possibility of companies for example financial services and tech relocating to Ireland seeing that these businesses need or want to be located in an EU location. This could create more demand for office space in Ireland, and leading to an increase in employment but may negatively affect the supply of suitable housing in the country which is already a huge issue. There could be some key opportunities for investors in building blocks of apartments but action will be required sooner rather than later. Should you choose to invest in this area O’Neill & Co. can provide acquisition services combining marketing intelligence, research and geographical knowledge.
There will be challenges for businesses who are used to trading freely with the UK both in the tourism sector and, particularly, in the export sector. The main challenge will be the currency impact and agreeing a price in Sterling and the effect of the fluctuating currency should Brexit go through.
The retail sector in Ireland will also face challenges arising with Brexit due to the close supply chains between the two economies and the large amount of high street retail brands operating across both markets. Brexit uncertainty is already negatively impacting consumer spend and business competitiveness, and is increasing exchange rate volatility. IBEC, the British Retail Consortium and the Northern Ireland Retail Consortium have called on the Irish and UK Governments to protect consumers and ensure that Brexit negotiations yield results for the industry that.
Once the UK leaves the European Union it creates an issue of a land border between Northern Ireland and the Republic of Ireland. This 300-mile open border is where the European Union’s customs union begins, as does its single market and the euro zone. The Issue is mainly how will that border be managed when the UK exits the EU? Will some mechanism be implemented to certify the origins of goods transported into the UK cannot travel into the European Union ie. Ireland, without some notification of their origin and whether they conform to EU rules etc, and vice versa. How this will be implemented is yet to confirmed.
O’Neill & Co. who set up the business in 2009 when the property sector was turbulent has seen many changes over the last 8 years nationwide but predominantly in the Dublin and Kildare markets. Setting up a business when the Irish economy was coming through one of the most difficult periods and seeing it come back strongly no doubt we are ready for this new unexpected challenge of Brexit and will be on hand to answer any questions clients have regarding property and investments.
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