Louth: First-time buyers and Brexit keep Louth buoyant
Second-hand purchasers are trailing behind first-time buyers in the rising Co Louth property market as their ability to compete with novice purchasers is being stymied by higher deposit requirements. They are also at a disadvantage as they didn’t receive the tax rebate introduced to first-time buyers of new builds in the October 2016 Budget.
The price of a four-bed semi-detached home in Louth is up 7pc to €235,000 in 2018, though price growth is expected to moderate to 2pc this year as a good deal more new home development is likely to come through.
“Second-hand buyers were held back because the help-to-buy scheme gives first-time buyers a 5pc tax rebate, so a new A-rated four-bed in Dundalk that costs €260,000 would in essence only cost €247,000 for the first-time buyer,” says agent Sinead Kellehan of Sherry FitzGerald Carroll. “A second-hand buyer would need a 20pc deposit, so a second-hand home on the market for €235,000 means they would need a deposit of €47,000, in addition to paying the mortgage.”
While Louth was one of the most active markets for new developments outside Dublin last year — especially in Dundalk and the seaside village of Blackrock — the supply still wasn’t high enough to cater for demand, especially from buyers keen to escape surging rents. A three-bed semi in Dundalk now costs between €900 and €1,200 to rent. Three-bed semis in the average Co Louth town cost €180,000 last year, up 6pc from 2016.
Kellehan counts eight new developments active in Louth through the last 12 months, most concentrated near the employments hub on the south side of Dundalk. In Drogheda, properties have been incrementally added to the Knightswood estate throughout the year.
Large numbers of foreign nationals working at multinationals such as PayPal and National Pen continue to drive up rents across Louth’s big towns, exacerbated by priced-out Dubliners, particularly in Drogheda.
Kellehan says, “Most first-time buyers are young professional couples with one partner working in Dublin and one working locally. Because banks are very tight on the 3.5 times loan-to-income ratio, a couple buying a €200,000 property would need a joint annual income of €60,000.
Brexit has turned out to be a blessing in disguise for the Louth residential market as it is attracting companies that want a presence in the Eurozone close to the Northern Irish border once the UK leaves the EU, says Brian Caroll, managing director of Sherry FitzGerald Carroll. He points out that some 300 jobs will be created by pharmaceutical firm Wasdell, which will invest €30m at an IDA site in Dundalk.