Wednesday 25 April 2018

Clare: Market enjoys one of Ireland's biggest rises

Stonepark, Barefield in Co Clare sold last year for €300,000.
Stonepark, Barefield in Co Clare sold last year for €300,000.

There was a notable urban-rural divide in the performance of the Clare market through the last 12 months.

The county as a whole had a very strong year, but growth in Ennis ran in very strong double digit percentages, while smaller towns saw more moderate growth in the order of 5pc. That's not such a bad thing, according to agent Diarmuid McMahon of Sherry FitzGerald McMahon, because for small towns that have seen no activity in years, any return to liquidity is welcome.

"Urban areas have been very strong. I think at the end of the third quarter of 2015, Clare saw some of the highest price growths nationally," says McMahon, adding that this could have been from a position of catch-up on the rest of the country.

After a very strong year, there is now a problem with supply in Clare. As with other counties, prices aren't yet where they need to be to make it feasible for developers to start building.

"The issue is that we're probably at €145,000 for a three-bed semi in Ennis, but when you talk to any developers, that needs to be up towards €200,000 before it becomes economical to build."

With the rise in finance costs for developers, compared to where they were in the boom, McMahon admits that it's hard to see where the supply will come from any time soon.

The lack of stock is also having a detrimental effect on the rental market, particularly in Ennis. Buy-to-lets would make up the bulk of the repossessions being sold by the banks, but these are now being snapped up by owner-occupiers, leaving very few rental properties on the market.

"In Ennis, you could be down to a couple of dozen of available properties to let. That figure would have been well over a hundred even a year ago," says McMahon. "In actual fact, a lot of properties don't even make the websites. Agents have a long list of applicants that they can just match off."

McMahon believes that there is a renewed interest from buyers based abroad in the past year. "We're starting to get overseas buyers as the story resonates internationally that the market here has stabilised. The continued strength of the sterling is having an impact too, particularly with Irish people living in the UK."

This new confidence from home and abroad, has now given the holiday home market a much-needed boost. A few years ago, people didn't want to be seen having the money for a holiday home because they felt they had to "keep down with the Joneses". That's no longer the case and places like Lahinch and Kilkee are seeing a return to the good times.

"There was a time when people weren't spending more than €150,000-€200,000 on holiday homes," says McMahon. "But now we've done a couple of deals into the €400,000s. That said, the houses that are achieving the high prices at the moment, would have been more than double that in the boom years."

McMahon thinks the completion of the motorway from Gort to Galway will only add to the county's appeal, making it more accessible. He predicts that prices will continue to rise, but not at the same pace as 2016.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Editors Choice

Also in this section