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Holiday homes in demand: How the pandemic has pushed up prices of staycation property

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Glengarriff Castle in west Cork sold for about €2.75m late last year

Glengarriff Castle in west Cork sold for about €2.75m late last year

Garrykennedy House, near Lough Derg in Co Tipperary, sold last September for more than €1.9m

Garrykennedy House, near Lough Derg in Co Tipperary, sold last September for more than €1.9m

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Glengarriff Castle in west Cork sold for about €2.75m late last year

A pandemic-fuelled surge in demand for Irish holiday homes has pushed up the price of many properties in coastal areas – with some rural retreats selling for more than twice the price fetched during the last recession.

Properties are being snapped up in tourist hotspots such as Lahinch and Doonbeg in Co Clare; Connemara in Co Galway; Kenmare in Co Kerry; and West Cork – with a marked increase in the percentage of sales to Irish buyers of second homes.

“Up until this time last year, demand for second homes [in Ireland] was very much coming from international buyers,” said Roseanne De Vere Hunt, head of country homes with Sherry Fitzgerald.

“We haven’t seen this amount of interest in holiday homes in a long time. Pre-Covid, it took six months plus to sell a second home – now they’re selling in four to eight weeks and you’d have a number of parties bidding instead of just the one.

“The pandemic has given people the time to sit back and think. They’re asking themselves if they really want to be jumping on a plane [for a holiday] – when they could just drive a few hours down the road [to a holiday home]. People are getting more used to Ireland and seeing the beauty that’s here.”

Remote working has also driven the property boom in rural beauty spots and coastal areas – with city workers relocating to the countryside for a better quality of life. Some locals seeking to get on to the property ladder have been priced out of their own area as a result. 

 

PRICE SURGES

Many of the properties being purchased as holiday homes are on or by the water.

“The price of many coastal properties in Clare has doubled in the last two years,” said Cormac O’Sullivan, partner with the Ennis-based estate agents DNG O’Sullivan Hurley. There’s often a big difference between the asking price of a property along the Clare coast – and the final price secured.

A detached house in Westpark in Spanish Point, which went on sale earlier this year with an asking price of €199,500, sold for €310,000, according to O’Sullivan.

“A detached home with a sea view in Doonbeg recently went on the market for just under €400,000, and achieved €500,000,” said O’Sullivan.

Popular spots in Clare for holiday home hunters include Ballyvaughan, Fanore, Doolin, Lahinch, Liscannor, Miltown Malbay, Spanish Point and Kilkee, according to O’Sullivan.

In 2013 – the tail-end of the last recession, three-bedroom semi-detached homes in Lios na Mara, Lahinch, typically sold for between €75,000 and around €80,000. “Today, the same houses are selling for over €200,000,” said O’Sullivan. “It’s a long time – probably as far back as 2007 – since prices like this were recorded in Clare.”

The so-called sunny south-east is a big lure for tourists – and there is a strong demand for holiday homes in Waterford’s Dunmore East, Ardmore and Dungarvan, according to Thomas Reid, partner with estate agents DNG Reid and Coppinger. “Demand is generally coming from those living in inland counties and in Dublin,” said Reid. “A lot of people from Waterford – who are either working in Dublin or abroad are buying a holiday home in Waterford.”

 

PERIOD HOMES

There’s a huge interest in properties in West Cork – but very little supply, according to De Vere Hunt. “If I had 20 properties by the water in West Cork, I’d have them sold immediately,” she said. “There’s a real interest in nice period properties by the water.”

Glengarriff Castle in west Cork, which overlooks Glengarriff Bay, was brought to the market last June and sold in late 2020 for around its €2.75m asking price.

“People have anything from €700,000 right up to €2.5m to spend on a second home,” said De Vere Hunt. “A lot of them are cash buyers.”

Garrykennedy House, a Victorian country house on about 50 acres near the shores of Lough Derg in Co Tipperary sold last September for more than €1.9m.

“The original asking price for Garrykennedy House was €1.9m prior to Covid,” said De Vere Hunt.

“Just when Covid hit, we went sale agreed – unfortunately, the sale fell through and we reduced the asking price to €1.58m. We then got offered 50pc less than the asking price. However, as we came out of the first lockdown and as buyers started to re-evaluate their lives, the interest surged in Garrykennedy House – with a number of parties bidding over the original asking price.”

 

RULES OF THUMB IF BUYING A HOLIDAY HOME

Given the surge in holiday home prices in many areas, it may be wiser to wait a few years to buy your second home  until prices ease off a bit. However, if you have your heart set on buying a holiday home in a particular area and you can afford to do so and feel the price and time are right, do your homework.

Decide how far you want your holiday home to be from your existing home. “Are you looking for something that’s a five- to six-hour drive away – or shorter?,” said Karen Mulvaney, property expert and managing director of Karen Mulvaney Property. “You may want to be close to Dublin or you may want to feel like you’re miles outside Dublin and away from everything.”

Decide what you want from your home. “Is it for retirement, is it for family?,” said Mulvaney. “If it’s for family, think about the age of your kids – if they’re older, will they want to come and stay in your holiday home? What do you need out of the property: do you need proximity to restaurants and amenities or are you happy to drive there?”

Don’t overlook maintenance and running costs as these will add up. “If you are beside the sea, will your property have to be repainted every year or two?,” said Mulvaney. “Remember that you will have to pay running costs on your property – even if you’re not in it.”

Don’t overlook the tax bills on your second home either – such as local property tax and any tax due on income you might earn from renting it out. Remember to insure your holiday home – and to follow any advice from your insurer around how you manage that home, particularly if it is vacant over the winter or for long periods.

It’s very important to visit the property a number of times before you buy – including during the week, at the weekend, in the morning and night, and when the weather is bad.

Speak to the locals and find out about activities and amenities in the area – and ask if the area is prone to flooding or if there are any other issues you should know about.

Be aware that your ability to drive to and from your property could be restricted if you’re buying near a beauty spot – as the area may be prone to traffic jams during the holidays and weekends while some visitors to the area may park inconsiderately. Litter can also be a huge issue at beauty spots.

“Do your research on the area,” said de Vere Hunt. “If you’re not familiar with the area, stay there for a few days in a bed and breakfast or guesthouse. Find out what kind of taxi system it has. If it’s a property you’re away from for most of the year, find out if you can get a caretaker for the property and how much does he or she charge. It’s a good idea to have someone that can drop in to check the property throughout the year. Decide what you will do security-wise – do you get cameras, gates on the property and so on.”

Don’t assume that everything you have taken for granted for in your existing home will be automatically available in your holiday home. “Check out your surroundings, connectivity and accessibility,” said O’Sullivan. “Can you get your Netflix and the other simple life pleasures that will make your stay enjoyable? You don’t want your holiday home to be a stressful place to be – you want what’s important to you to be available.”

It is often rural properties which are bought as holiday homes – and if you have lived in a city or suburbia all your life, it is very important that you’re aware of the issues that you could run into with such properties. For example, should you be buying a property with a septic tank, make sure that you know where the tank is, check that the septic tank works and that it meets all planning and other rules, and get the tank inspected by a qualified person before you buy the property. Otherwise, you could have to replace the tank and be facing a bill running into the thousands as a result.

Another thing to be mindful of is your water supply – don’t assume that your water is safe to drink or that you can get water to the property, particularly if the only source of water is a private well. Check the quantity, as well as the quality, of the water before your buy a home with a well. Should the water be coming from a group water scheme, find out if you need to pay to be part of that scheme – and if there are any issues with the water.

Be sure too that there are no issues accessing your property or its facilities. Running into a right of way issue (where you need to access a piece of land over a lane or other piece of ground owned by someone else) with a neighbour could prove incredibly stressful and costly.

Ask why the property is being sold and find out what the neighbours are like. The last thing you want to discover is that you’ve bought a house beside the local criminal or town crank. No matter how idyllic the holiday home seems, be fully informed before you buy. 


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