Carlow: Crash-hit Carlow now playing recovery catch-up
Carlow was one of the worst- affected markets during the property crash, with almost 50pc shaved off house prices. In the aftermath, the town itself, home to Institute of Technology Carlow, was - like other regional college towns - flooded with distressed investment property sold by receivers, a legacy that continues today.
Agent Harry Sothern of Sothern Real Estate Alliance estimates that a third of the properties he handles today are distressed or repossessed, but down from 50pc during the depths of the property slump.
"Like Waterford, Athlone or anywhere there is a college, a lot of houses were purchased for investment and lot of those people went on to interest-only mortgages and jobbed along," Sothern says. "Then the banks said, 'We want capital and interest payments now,' so our market was flooded with decent-quality mainly semi-detached houses and apartments that had been repossessed or voluntarily handed back to the bank. These properties were sold for cash and at a discount, which kept prices artificially low. The number of these sales has probably dropped to one third, but that's still significant.
"I don't think too many one or two-bed apartments which sold in Carlow in the last number of years were privately sold - they had mostly been repossessed, apart from those sold because the owner had died."
So from this low base, the price of a one-bed apartment has jumped 30pc to an average €65,000 through the last 12 months and will likely jump a further 15pc to €75,000 this year. The price of a two-bed apartment, meanwhile, surged 22pc to an average €85,000 last year and is set to rise by 19pc to €100,000 in 2018, Sothern estimates. While the headline inflation seems high, in reality it is recovery catch-up.
The three-bed semi-detached style in town is the most in- demand house type today, compared with a four-bed a year ago. The price of the former climbed 8pc last year and will likely climb by 6pc this year.
First-time buyers now account for a quarter of the market, driven in part by purchases from foreign- born buyers from Eastern Europe, particularly Polish born buyers, who tend to spend between €100,000 and €150,000 on a first property after racking up sizeable deposits from careful saving.
New investors make up the majority of purchasers, including those who are buying residential and commercial property through their pensions.
Plenty of second-hand buyers seeking are still trapped in negative equity, though. For instance, Sothern sold four-bed detached houses in one particular estate for €380,000 in 2006 and 2007, and these homes are now worth about €280,000 even after the hefty percentage increases through the last 12 months.
Still, Carlow has seen an influx of buyers priced out of Naas, Kilkenny and South Dublin who are willing to commute to Kildare and to the capital in return for a larger home. "Carlow has been a lower-priced county for probably six or seven years but places like Naas and Kilkenny have become quite expensive, so we are viewed as good value compared to those markets," Sothern says.
While owner-occupiers are being "put through hoops" to secure mortgages, a small number of buyers who cannot get mortgage approval are managing to secure loans of up to €200,000 from the county council, or up to 97pc of the purchase price.
"In some cases, people with council loans end up paying less in mortgage repayments than they would in rent," says Sothern.