Irish holiday home market makes strong recovery

The recovery in the market for Irish holiday homes remains strong despite poor summer weather.

Estate agents across the State are reporting a pickup in business this summer, with a recovering economy, low-yielding deposits, a stronger sterling and improved infrastructure all cited as factors behind the interest.

Areas close to Dublin appear to be first in line for the recovery. Catherine O’Reilly of Sherry FitzGerald in Wicklow town, who sells holiday homes in nearby Brittas Bay, says business is “much, much better” this year, with price growth of about 18-20 per cent off the bottom of the market.

In Wexford, Colum Murphy of Kehoe & Associates, says there has been “a noticeable increase” in activity on last year, particularly in areas like Rosslare, Kilmore Quay and Curracloe.

“There is definitely an increase in demand,” he says, citing factors such as the general upturn in the economy as well as the extension of the M11 motorway which links Dublin with Wexford.

Indeed as figures from the property price register show, there were 55 sales in Rosslare since the start of the year, up from 29 on the same period in 2014. But much like the weather, reports are mixed.

Slow improvement

In west Cork, Maeve McCarthy of Charles McCarthy Estate Agents in Skibbereen, says prices are “slowly improving” and that properties are achieving their asking prices – but only when they’re priced in line with the market.

“Any property up to €200,00 is selling away,” she says, but “above that it gets more difficult.”

Given the difficulty in earning more than about 1.5 per cent on deposit, McCarthy says that low interest rates mean some people will put their money into a holiday home, because at least “they’ll get the use of it”.

Currency conversions are also at play. In the Wicklow area, sterling’s current relative strength is a “massive factor” in driving demand, Ms O’Reilly says, with UK buyers getting a lot more value for their money.

“We see a lot of Irish people [living abroad] looking to get somewhere over here for the ‘Irish summer experience’,” she says.

Irish property has become a lot cheaper for US and British buyers, given the strengthening of the dollar and sterling.

A €200,000 home that would have cost a UK buyer about £160,000 last August will now only cost about £140,000.

UK buyers

But UK buyers are less in evidence in Cork, with Ms McCarthy saying that, given the currency factor, buyers from Britain are not at the volume she’d have expected. Rather, she has noted a lot of Irish people are back buying homes.

Yet with prices still so far off the peak, many holiday home owners are still trapped in negative equity, which is constraining supply.