Thursday 14 December 2017

Cavan: 25pc surge on low base

Bellamont Forest, Cootehill, Co Cavan. Sold for €2,050,000.
Bellamont Forest, Cootehill, Co Cavan. Sold for €2,050,000.

Cavan once again turned in a record price increase of 25pc through the last 12 months, coming on top of a similar 19pc increase in the previous year.

The increases have been rooted in the availability of very affordable property amidst tightening supply and the recovery of prices from a very steep collapse.

The strongest value surges were to be found in Cootehill, Bailieborough, Virginia and Cavan town, according to local agent, Tony Breathnach of Cavan Real Estate.

"We'd have at least a dozen people waiting for properties to come along in these towns. Demand is so high but supply is so low. It will continue to be a problem because, while prices have increased by 25pc, they still haven't reached the cost of production for builders. That will probably take another 18 months," says Breathnach.

The new lending restrictions that require a 20pc deposit for homes over €220,000 have had a positive effect on the county. "If someone has €350,000 to spend, they'll have to pay a €70,000 deposit for a modest property in Dublin," Breathnach adds, "but if they come up to Cavan they'll get a very fine house for €200,000 and will only require a €20,000 deposit."

Commuting from Dublin is a trend that has re-emerged. This had not been happening for the past decade but Breathnach has noticed that people are once again being priced out of the capital and heading to places like Ballyjamesduff in particular, and Virginia and Bailieborough to a certain degree.

Growth has been slower in smaller towns around Cavan but Breathnach says that properties that wouldn't have moved at all in the last seven years are starting to sell, just not at the same pace as the bigger towns.

Breathnach believes prices will continue to rise in the coming 12 months because they have to.

"They need to reach the price of construction," he says. "A good semi-detached house in Cavan is making €110,000, but to build it would cost in the region of €150,000-plus. We would hope to reach an equilibrium in 2016 and return to development by the start of 2017."

A further increase is on the cards for Cavan, according to Breathnach. "I think we'll continue to rise strongly again this year at a rate of 15pc and things will stabilise at that when the builders are able to return."

Irish Independent

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