Monday 27 January 2020

Brexit is stalling recovery in the Border housing market

Uncertainty is hitting confidence, even as Dublin sees a surge in UK interest

There has been a rise in interest for luxury homes in Dublin. Stock picture
There has been a rise in interest for luxury homes in Dublin. Stock picture
Mark Keenan

Mark Keenan

Brexit is damaging recovery in the regional property market with Donegal particularly impacted by uncertainty following the UK's decision to leave the EU.

There have been reports of a surge in interest in luxury homes around Dublin as high-earning London executives scope out a potential move to Ireland.

But in other parts of the country the Brexit fallout is proving to be bad news. According to the latest figures by the Real Estate Alliance network, parts of Donegal are the only spots in Ireland to show a fall in prices through the past year.

Values are down in Bundoran by more than 3pc on 12 months ago. Prices for three-bed semis have remained at €85,000 in south Donegal for the past three quarters, but this masks a huge drop off in business from the north, according to REA McElhinney, in Bundoran.

"Prices are static on low volume of product, but the amount of transactions has plummeted, and stock levels are still challenging," said director Michael McElhinney.

"The poor exchange rate from the sterling area in contrast with last year has had an effect - particularly as 50pc of our market would be cross-Border trade. People in the retail and hotel business feel that the crunch point for them is when the exchange rate hits 90 cents, and we are not far off that point now.

Read More: Relaxing deposit rules just not an option, even if it means families must save up €83,000

"There is an overall hit to confidence and to people's willingness to make a major financial commitment to property while there is uncertainty over the Border.

"On the upside, we are seeing a definite increase in dollar interest, and the market for second homes has started to spark again with families with children relocating from the Dublin market.

"We have seen a definite increase in people working remotely - living and operating in Donegal, north Leitrim and Sligo and maybe commuting twice monthly to Dublin."

West Cork, long a popular location for the English, has also seen a big slip in UK demand since Brexit uncertainty began. Prices in Monaghan and Cavan are also rising at a more sluggish rate than elsewhere.

The findings in the quarterly report by the Real Estate Alliance come just days after the Irish Independent reported fresh interest in desirable homes in the Dublin area.

Read More: Work has yet to start on 23,000 homes in capital which have permission

Keith Lowe, boss of the DNG network, said the Brexit influx has already started and that his agency has already concluded the sale of a number of trophy homes in the capital to British-based executives.

The trophy home end of the market has been sluggish through the past few years and, ironically, Brexit has also been partly the cause of this.

Weakness in sterling since the UK referendum caused high-earning Irish people based in Britain, who might have been planning to buy here, to postpone their decisions as their spending power was slashed drastically by the resulting currency slide.

"People who were looking to close a sale at the top end were suddenly finding themselves down €500,000 or more. Now as Brexit becomes more definite we are beginning to see the reverse trend. In this case non-Irish connected British citizens are starting to buy houses," said Mr Lowe.

Irish Independent

Also in Business