Foreign buyers drive the country house market
Published 28/02/2016 | 02:30
The country house and farms market in Ireland has been extremely active over the last 24 months, with a high number of transactions. Many of these were properties bought during the Celtic Tiger years by developers seeking opportunities for hotels and golf courses and were sold on behalf of receivers and Nama.
The profile of buyers is very interesting, with 60pc of all sales above €1m coming from overseas buyers and ex-pats returning to Ireland, 40pc of which are from the UK, 30pc from the US, 20pc from the Near or Far East, including Australia.
In the price bracket from €500,000 to €1m, 40pc are Irish, 40pc from the UK, 15pc from Australia and New Zealand, with the balance from Europe and the Middle East.
The vast majority of these properties need very substantial investment and upgrading. This is really good for Ireland Inc, as all the local tradespeople and businesses benefit very substantially from these renovations.
In many cases, the spend in upgrading can be from €500,000 to €2m and, in exceptional cases, from €2m to €5m, depending on the size and condition of the property.
The strength of sterling has been a very large factor in our favour, together with our low cost of private schooling compared to other countries. Last year was the year of the castle and more castles changed hands than at any other time in recent history.
For the first time ever, farmland prices are now higher in the UK, with good land averaging in excess of £12,000 sterling in good locations, not taking into account the euro differential.
Many farms have been purchased by young dairy farmers over the last 12 months and we have seen relocation from Scotland to Ireland by dairy farmers seeking dairy operations.
Brexit raises a number of interesting questions about its potential effect on the market. If England were to exit the EU and Scotland stay in, would we see migration of smaller farmers to Ireland to take advantage of EU subsidies?
The country house market is driven by international sentiment and uncertainty over Brexit and large swings in international currency can have a major effect on the market quite quickly.
Political stability is particularly important for inward investment and by the time you read this on Sunday morning, we will have a better idea where we are on that front.