Offaly: 10pc rises kick in for Offaly as commuters get priced out of Kildare
The price of a three-bed semi in Co Offaly is up 10pc from a year ago to an average €165,000, as first-time buyers chase homes alongside investors in search of high-rental yields.
Edenderry has seen prices rise an average 15pc, pushing them almost on a par with Tullamore, Offaly's county town. The proximity of Edenderry - some 34km from Tullamore - to the Co Kildare border has attracted buyers who work in Dublin and who have found themselves priced out not only of the greater Dublin area but Kildare towns such as Kilcock, according to local agent Richard Cleary of Property Partners Cleary.
Birr, meanwhile, remains a popular destination for investors - some 61pc of properties there were acquired for investment purposes between January 2015 and August 2017, Central Statistics Offices figures show.
With interest rates remaining at a record low, Offaly investors are not content to leave cash on deposit for little to no return and so are putting their money into apartments and three-bed semis in Tullamore. These can command a rental yield of up to 16pc - in addition to capital appreciation, Cleary says.
"First-time buyers were competing with the investors, who have come back into the market over the last two to three years and are seeking two-bed apartments and three-bed semis," Cleary said. "A three-bed semi would get a rent of between €850 and €1,000, so the yield is excellent in terms of an investor's point of view.
"We also sold a few houses throughout the year to Irish emigrants who intend to return to Tullamore in 2019 and 2020 from places like Australia and plan to rent them out in the meantime."
The prices of one-bed apartments in Co Offaly soared 21pc last year and are expected to rise 13pc in 2018, while prices for the two-beds climbed 13pc last year and are set to rise 12pc this year.
"Anything under the €200,000 mark is popular because it's affordable. Over that price, prospective trader-uppers who are getting out of negative equity for the first time in 10 years are being hit by the Central Bank's mortgage rules. They are being penalised - everything is about the first-time buyer."
Demand is also being underpinned by Tullamore's nascent economic recovery and job creation. While Cleary complains that most IDA jobs are created in Athlone and Mullingar, demand has been shored up by employment at Midland Regional Hospital in Tullamore as well as at Tullamore Dew. Distilling of the whiskey brand returned to Tullamore in 2014 and owners William Grant & Sons invested €25m in expansion of the new distillery last year.
However, prospective owner- occupiers' competition with investors has been compounded by a shortage of affordable property. There has been no new development in the county in almost a decade, though that looks set to change.
A 25ac site in Tullamore, known locally as Kearney's Field, that could accommodate hundreds of new houses was sold last year for €3.25m - almost three times its asking price. The site, which has residential zoning, had fielded offers of up to €20m back in 2007, according to Cleary.
"The sale showed there is some confidence coming back into the town, though my understanding is that the developer won't be building before the end of 2018," he says.
"Developers would want to get €235,000 for a three-bed semi before making any profit and we're not at those figures yet."