Friday 6 December 2019

Donegal: Stock dries up as sterling fuels Donegal gains

Killaghtee House, Dunkineely, Co Donegal. Sold for €302,500.
Killaghtee House, Dunkineely, Co Donegal. Sold for €302,500.

For Bundoran and surrounding areas the biggest factor in 2015 was the strength of sterling.

Local agent Cormac Meehan says that many people came from Northern Ireland and the UK in search of a holiday home in a beautifully scenic county that has been among the hardest hit by the crash and still offers some of the cheapest homes in Ireland. Prices increased by an average of 7pc in Donegal through the last 12 months.

"If something here is priced at €90,000, it's converting back to £60,000 sterling. They would spend that on a mobile home in the UK so to get bricks and mortar at that discount is quite substantial for them," says Meehan of the British and Northern Irish market.

Meehan also noticed that there is a new honesty in property dealings. He says that buyers are putting their cards on the table because they understand the market a lot better than they did a few years ago.

There will be enough stock around Bundoran for the first quarter of this year, says Meehan, but he's worried about the lack of new builds.

"There's been absolutely no building activity in Donegal. It would cost more to build than buy an existing dwelling. Even one-off builds were very rare last year," says the agent.

It wasn't a record-breaking year for Meehan but it was a steady year. "2015 was a year of consolidation and recovery," he says. "It was nice to see buyers back on the pitch, banks back on the side line and all of us coping a whole lot better with the new environment."

Meehan is cautiously optimistic about 2016. "It's really down to the currency and economy. The market has been educated and people will no longer undersell properties like they may have two years ago. I would put an increase of 7-10pc across the board in 2016, with up to 15pc on lower-priced fixer-uppers."

Over in Letterkenny, Joe Reynolds from Property Partners Paul Reynolds, also says that the strong sterling had a huge impact on the market in Donegal in the last 12 months. He sees buyers coming from the UK who are interested in holiday homes and permanent homes. Shortage of supply is a big problem around Letterkenny.

"The biggest problem at the moment is that current prices are still too low for developers to build," says Reynolds.

"There is no choice out there for first-time buyers. Until three-bed semis are achieving prices of €160,000, builders aren't going to move back in."

Reynolds believes prices will continue to rise in the next 12 months.

"The market has improved for us year-on-year for the past three years so we'd be confident that this will carry into 2016. For the lower end of the market, prices will have to rise by a minimum of 7pc upwards."

Irish Independent

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