Deutsche Bank reported that the Republic of Ireland had more than 289,000 vacant homes in 2012 and it was estimated that with a staggerring vacancy rate of 15 percent the oversupply could take 43 years to fill (and 200,000 homes "may need to be bulldozed").
Australia's capital cities on average have a vacancy rate of 1.9% with some such as Sydney (1.6%), Adelaide (1.4%) and particularly Perth (0.8%) having very low vacancy rates indeed.
With virtually no population growth to speak of in Ireland, the housing market is in turmoil. Investors should look to countries (or regions) where the population is growing very strongly and supply is capped. Australia's population grew by 359,600 in the year to June 2012, a very healthy rate of growth. Cities in which supply is not meeting demand reports Matusik, include Sydney, Perth and Brisbane and Matusik lists some regional centres too including, for example, Newcastle.
Promoters of regional property frequently invoke the "...in the last decade" argument, which is fair enough. But Australia has not experienced anything even approaching painful recession in that time. Hopefully we will not do so for the next decade either, but there are never any guarantees.
Importantly, experienced investors look away from the most expensive sector of the capital city markets where price action is notoriously volatile and yields frequently woeful (although it's tough to argue that capital city properties in quality suburbs have performed poorly over time when you note that a house in Dubbo costs ~$250k but a house in, say, Dover Heights ~$2.5m).
Instead, investors should look towards established properties closer to the median price which are (a) more affordable to buyers in those suburbs and therefore in great demand, and (b) provide reasonable yields. Importantly they want to see sustainable real wages growth - overseas markets have shown that property prices cannot solely be inflated by burgeoning household debt ad infinitum.