the property professional
CASH – IT’S GOING OUT OF FASHION! FROM JANUARY 2008, NEW, MORE STREAMLINED, BANKING REGULATIONS SHOULD MAKE PROPERTY PURCHASES MUCH EASIER RIGHT ACROSS THE EUROZONE, WRITES PETER CLUSKEY.
Peter Cluskey
Here’s a little-known fact: if you took all the banknotes used daily in Ireland and piled them one on top of the other, that mountain of cash would be three-and-a-half times the height of the Dublin spire - in other words, about 420 metres tall. Not many people know that! And if you think it’s just one more piece of useless information, then you are quite wrong, at least as far as Stewart MacKinnon is concerned. As Chief Executive of the Irish Payment Services Organisation (IPSO) that pile is an exact measure of one-half of the challenge he faces by the end of the decade - persuading Irish consumers not to use cash. The other half is no easier persuading them to abandon cheques. Set up in 1997, IPSO is wholly owned by the retail banks. It introduced chip and pin in 2003 and currently it’s overseeing Ireland’s integration into the Single European Payments Area (SEPA) which will revolutionise banking across Europe over the next three or four years. And why is SEPA important from an auctioneer’s point of view? Well, look at it this way: the overseas market has become increasingly valuable in recent years to Irish auctioneers and estate agents. Irish buyers are expected to spend a remarkable €7 billion on foreign property this year alone. So anything that makes those purchases smoother and more attractive to the purchaser has got to be good news. Because buying property abroad is never easy. There are language barriers. There are legal differences. There are tax differences. There are planning differences. The introduction of the euro should have made banking across Europe more transparent but fat chance!
CHARGE THROUGH THE NOSE Stewart MacKinnon
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the property professional
The reality is that banks are the same the world over: their priority is to make as much money as possible by charging you through
the nose for as many as possible of the services you’d imagine should be pretty routine, quick - and free. And the euro-zone has made precious little difference. As one who’s bought abroad, I can tell you that for a fact. Take for example the wire transfer, where money is transferred from one country to another and from one bank to another. Yes, you’ll find the money has left your account or your client’s account - in Cork or Limerick on Monday evening but has it arrived in your Spanish, French or Italian account? No such luck. Two days later it turns up. But where has it been? Nobody knows. Then there’s the Irish cheque you lodge in your Spanish account, expecting that because we’re all in euro-land now it will be processed with the same speed as a local, Spanish cheque. Forget it. It can take as long as three weeks and incur a hefty fee as well. Why? Again, nobody knows. And beware, because although you would reasonably expect Irish cheques to be universally accepted now in other European countries, you’ll often find them being turned down by builders, for instance, because they take so long to clear. Before they settle down to your client’s renovation project on the Algarve they’ll often want agreement that they’ll be paid from a local Portuguese bank account. It’s crazy. But it’s true. However, the good news is that all that is about to change, maybe not today, maybe not tomorrow, but certainly from January 2008 - just 12 months away. That’s when SEPA comes into effect, more as a result of political pressure from Brussels for practical steps towards European economic integration than as a result of any newfound willingness on the part of banks to do the decent thing for their customers. “As a result of the streamlining of systems and services which will be part and parcel of SEPA, someone in Dublin or Galway should be able to buy a product in Slovakia as easily as they could here at home” says