Wednesday 26 November 2014

Rock Bottom: The five cheapest places to buy in Ireland

Eithne Tynan

Published 16/05/2014 | 02:30

The scenery in Donegal is something to behold
The scenery in Donegal is something to behold
The beautiful lakes of Co Cavan
A ghost estate in Carrick-on-Shannon that is lying empty
Kathleen Coleman in her home town of Carrick-on-Shannon in Leitrim
TV series Moone Boy which was set in Roscommon
The picturesque countryside
The ruins of Roscommon Castle
Sinead Mahers and daughter Ellie look out from their apartment in the ghost estate of Corrig Glen in Portarlington, Co Laois

Location, location, location – supposedly the three most important considerations when buying a property.

But there are a few places in Ireland that always seem to be bereft on all three counts – even though they might be some of Ireland's prettiest and most soul-enriching spots.

In the current climate of a gradually lifting economy combined with stunted property price growth in some of Ireland's less sought after locations there's the opportunity for city buyers to pick up a remote holiday home in some of Ireland's beauty spots with least property market punch, sometimes for as little as the price of a mid-range family car.

So which areas of these counties have the most depressed property values and, more importantly, why? We spoke to local agents in each county to find out. Interestingly, they all cited quite different reasons, suggesting that the situation is more complex than it appears.

So here they are, Ireland's five cheapest locations, listed in ascending order of affordability.

No 5: Donegal

Average Price of a Four-Bedroom Bungalow: €144,000

Average Price Three-bed semi: €69,000

Donegal is the perfect example of how you can't eat the scenery. Depending how you like your landscape, you could argue that Donegal is Ireland's most beautiful and wildest county and it's also one of Ireland's cheapest.

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The scenery in Donegal is something to behold

The big disparity between the price of four-bed and three-bed homes shows the relative difficulty in selling a smaller urban home in Donegal on the basis that the country doesn't have a major town, let alone a city, so scattered is its population. Plus of these properties many are in or near smaller depressed urban centres, which made very little economic progress during the boom and are now on their uppers.

Where there is little or no commerce, there will be less employment and hence no demand.

Donegal is already historically popular with holidaymakers from the North. Yet the median sale price of property there in 2013 was €96,750 – way below the national average of €143,000.

Brendan McGee, director of Franklins estate agents in Letterkenny, points to west Donegal – Glenties, Gweedore, Dungloe and Ardara for instance – as the areas with the lowest property prices. And he is quite clear as to what's going wrong there.

"The towns and villages on the periphery of the county have been absolutely decimated by emigration, so there's no demand for properties in those areas any more," he said.

Those regions are also not in demand among Northern holiday-home buyers, he said, as they're harder to reach than more popular areas such as Rathmullan, Dunfanaghy or Downings.

As for Letterkenny itself, the main county town, McGee acknowledged that property there is very much undersold. "On average it costs about €120,000 or €130,000 to build a three- or four-bed semi. Arguably there's no three- or four-bed semi in Letterkenny worth more than €100,000 at the moment."

For that, McGee blames a flood of residential investment properties being released onto the market by receivers, banks and so on, which he said is keeping a cap on values. "I suppose you could say it's also fast-tracking a process, but we're five years into now."

Meantime, many would argue that Donegal was shamefully neglected in the boom years. With luck burgeoning tourism will help boost the county going forward.

No 4: Cavan

Average Price of A Four-bed bungalow: €132,000

Average Price of A Three-bed semi: €64,000

Eugene O'Dwyer of DNG O'Dwyer in Virginia, Co Cavan, believes west Cavan – Belturbet, Ballyconnell and Bawnboy are just too far off the beaten path to attract interest strong enough to boost price significantly even though it's undoubtedly the most scenic area of the county.

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The beautiful lakes of Co Cavan

"The day of scenic is gone, I'm afraid. It's all about location. That's what sells property at the minute. West Cavan is just that bit too far away from Dublin," he said.

Similarly, Peter Donohoe of REA Peter Donohoe, which has offices in both Carrigallen in Leitrim and Ballyconnell in Cavan, says property in the area is "absolutely cheaper than it should be".

There is strong evidence that homes in Cavan are now selling for a good deal less than it would cost to construct them.

Towns have been badly hit by the downturn and the collapse of the Quinn empire, which had a vast knock on effect on the local economy.

However, Cavan has its famed lakes to look to as a tourist generator – perfect for watersports and for pike angling – enormously popular with German and French tourism.

The soaraway success of the Virginia Pumpkin Festival, which brings 20,000 to the town each October, and now brings tourists from abroad, is an example of how the locals can pull together and generate a tourism buzz.

Some parts see locals notoriously private in giving details about properties for sale – including the asking price – and many from outside the county allege that this makes purchase enquiries unnecessarily difficult for buyers from outside the county.

No 3: Leitrim

Average Price of a Four Bed Bungalow:€120,000

Average Price of a Three-Bed semi: €58,000

Leitrim's status as Ireland's most underpopulated county doesn't help matters when it comes to property values.

Nor has its high proportion of ghost estates – a census of ghost estates taken in 2010 showed that, at 21 developments, Leitrim had by far and away the most ghost estates per head of population. As late as last year, one local politician last year estimated that Leitrim's empty housing stock of 7,000 units would require the county's population to increase by over 70pc just to fill the excess dwellings.

To make matters worse, many of which are located in remoter areas because they came about under rural renewal housing incentives.

With its generally poor agricultural land, Leitrim also had a strong tradition of emigration through the 20th Century, which already left many empty homes in its wake - the reason for introducing the disasterous incentives in the first place.

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Kathleen Coleman in her home town of Carrick-on-Shannon in Leitrim

Cavan and Leitrim are similar to each other in that they don't have much indigenous economic activity apart from tourism, which is fickle.

Agents say the Leitrim end of Cavan and the Cavan end of Leitrim – arguably the prettiest parts of each county – are where prices are lowest.

Peter Donohue said Leitrim demand was highest around Carrick-on-Shannon, and lowest in the east of the county, around Carrigallen.

However, he did add that there was a high demand for lettings, and a consequent shortage, and he added that sales were also on the up.

"People are beginning to realise that it's quite a good buy because property is cheap here, and naturally if it's cheaper now there's a better chance it'll improve as time goes on," said Donohoe.

The improvement in prospects, possibly helped by the tourist engine that is Carrick-On-Shannon and the success of the Shannon Erne cruise circuit, and the realisation in many parts of the country that there might be value to be had, means Leitrim's prospects of lifting out of the bottom five in the years ahead are reasonable.

No 2: Roscommon

Average Price of A Four- bedroom bungalow: €116,000

Average Price of Three-bed semi: €56,000

Tax incentives also wreaked havoc in Roscommon where there has also been a big overhang of empty stock with the country's second highest number of ghost estates overall at 35.

John Earley of Property Partners Earley in Roscommon adds: "There's an overbuild of developments because of Section 23. That's the history of it. Towns like Tulsk, Castlerea, Rooskey, Strokestown – any of these towns have three or four developments sitting on the edge of them," he said.

Earley said the problem was countywide, though not quite as acute in the main town of Roscommon.

Houses in Roscommon town sell at about 25pc below building cost; in Tulsk or Boyle or Strokestown, they sell for about 50pc below the cost of constructing them, he said.

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TV series Moone Boy which was set in Roscommon

However, even if the Irish aren't seeing the value on offer, foreign buyers are voting for Roscommon with hard cash.

Earley has tapped into an emerging market among English buyers.

"Of the last seven or eight sales I've made, I had an American purchaser, at least six English purchasers and one Irish.

It's clearly driven by value. They're getting a chance to buy a house that should be €150,000 for €50,000.

The British buyers in particular can sell a small rural property in the UK and buy something quite substantial in Roscommon. UK "horsey" types are especially drawn to the county.

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The ruins of Roscommon Castle

"It's the same market I witnessed in the '70s and '80s when we used to do major exhibitions in England because that was where we had to go.

"There was no market here. But that all dried up as the market accelerated here and we were no longer value for money."

Earley has seen a far higher volume of sales recently – "which we're delighted with, we're flat out" – but without an accompanying spike in prices – thus far its only an acceleration in activity and transactions.

"But I think it has to happen," he said, "because if I keep selling at the pace I'm selling, give me a year at it . . ."

Cheapest Place in Ireland: Laois

Average Price of a Four- Bedroom Bungalow: €116,000

Average Price of a Three-Bed Semi: €55,000

While four-bed bungalows are the same price as in Roscommon, the Daft.ie survey shows that Laois three- beds are just €1,000 cheaper. So Laois achieves the status of Ireland's cheapest county to buy in by the tightest whisker.

It may surprise many to learn that prices in farm-rich Laois are flagging relative to the rest of the country but Laois is different from the other four counties in that it doesn't have any profile as a holiday home destination, as local agent Matt Dunne of Matt Dunne & Associates in Portarlington points out.

Ireland is a saucer, and Laois is flat which means there's not an awful lot of scenic interest in the midland county, says Dunne. "And we're only an hour from Dublin – why would you have a holiday home here?"

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The picturesque countryside of Laois

The Laois property market in its heyday was sustained instead by commuters from Dublin, and that phenomenon disappeared after the crash. Many of the county's 15 ghost estates therefore ended up located near the county's big population centres and so they also kept town prices down.

As a commuter county in the latter years of the boom, the tap of families from Dublin was turned off once the property market crash kicked in and petrol prices went up.

"We used to get a hundred phonecalls a day. Then the phonecalls went down to 10 a day," said Dunne.

"What happened was that the cost of commuting became too expensive – the cost of fuel. And anyway they didn't need to come down this far because property prices in Dublin were so cheap relatively."

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Sinead Mahers and daughter Ellie look out from their apartment in the ghost estate of Corrig Glen in Portarlington, Co Laois

However, Dunne is encouraged by rising house prices in the capital. "It's great to see a bubble, if you want to call it that, in Dublin because of the domino effect. If it's a big bubble in Dublin then it's a smaller bubble in Naas and a smaller bubble in Newbridge and eventually it finds its way down to Laois.

"We need demand like that in Dublin for us to survive. We're just hanging on to the coattails. And nothing functions down here, almost, without it. If we're relying on the local trade at the moment there's nothing going to happen."

But paradoxically enough, the cheapest house in Ireland – at the time of going to press – is not in any of the bottom five counties.

It's a three-bedroom semi-detached bungalow at Crinkill, Birr, Co Offaly, on the market via DNG Glen Corcoran for a cool €19,950.

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