Wicklow South: Rosy outlook for southern part of Garden with 12pc increases
Published 23/01/2016 | 02:30
Demand for houses in South Wicklow was such through the last 12 months that they regularly shot above their asking or reserve prices and most entered 2016 up 12pc in the past year.
This followed a buoyant previous year in which prices hiked by 10pc after the market found its feet again in 2014. Paschal Bermingham of Sherry FitzGerald Myles Doyle in Arklow says the market is going to continue to rise in 2016 simply "because it has to".
"The situation is that prices need to increase some more before we see a return to new development," says Bermingham. "Builders haven't returned to developing for two reasons: the margins are too tight at the current level; and banks are very slow to lend to builders for new developments.
"We would anticipate that a three-bed semi should be making €200,000-plus in order to justify the cost of an A-rated construction, but we're not quite there yet."
There are a few planning applications that could actually go ahead in the Wicklow South area but these are being held up by sewage treatment infrastructure issues. This is something that Irish Water is looking into but Bermingham believes it will take time.
The lack of supply means that self-builds are once again becoming popular in the county. "As the market rises, an eight-year-old property on half an acre could fetch about €350,000. At this moment in time, you could buy a site for €50,000 and build for €250,000, and have the home of your dreams," says Bermingham.
Wicklow County has always been considered to have one of Ireland's toughest planning systems for one-off homes.
Bermingham notes that some people are now going a couple of miles down the road and buying sites in Wexford where the regime is considered "easier".
Despite the surge in values from a low base, the rental market is suffering in Wicklow South with Bermingham noting many recession-punched buy-to-let investors throwing the keys back to the bank.
"People bought these properties as an investment but they are still in negative equity and tired of subsidising the mortgage repayments. These properties are now being sold and bought by owner-occupiers which is squeezing availability of rentals."
There is also a serious need for social housing in the county but Bermingham believes that it is now up to the private sector to supply houses for public demand. "Local authorities haven't built houses in about 30 years around here."
Arklow has received a boost with the completion of the M11. As a commuter town, the finishing of the road has made a huge difference. There is now a knock-on effect from North Wicklow where buyers are happy to come a bit further down the motorway for affordability.
Bermingham is positive about the year ahead for Wicklow South. "My prediction for next year is a further rise of 7-10pc, and it wouldn't surprise me if it was more because there is still a lot of movement in the market which might allow for the builders to move in."