Saturday 17 February 2018

Home truths: From blight to a rural cash boom?

Airbnb photo: Getty
Airbnb photo: Getty
Mark Keenan

Mark Keenan

Holiday homes in Ireland, whether rented or owned, provided annual solace for generations of Irish families who yearned for these thresholds as summer approached. City folk headed to bucket-and-spade seaside resorts where they stayed in caravans, chalets, cottages or mobile homes.

Or they headed to scenic parts of the West - Kerry, Cork or Donegal to experience clean air, a different local culture and fields where kids could run and explore.

Then cheap air travel arrived and we headed instead to Spain, Greece and Yugoslavia. In the following two decades, few non locals bought or rented small rural second-hand homes on Irish turf for hols - save for Germans and Brits in search of the good life.

Through the 80s and early 90s, when the economy was down and emigration was rife, they had the market to themselves, snatching fine homes with land for as little as €20,000. The Irish holiday home reduced in value in areas diminished by depopulation.

But from the late 90s, their low prices and scenic locations caused them to start being acquired for a different kind of break. Wealthier Irish city dwellers began seeking weekend homes to go to aside from their one a year to the Costa. During the Tiger years, a buying frenzy erupted, coupled with development of bland holiday estate homes on the back of shameful politics-driven investment incentives.

It was at this point that attitudes changed, when rural communities began complaining of 'holiday home blight' whereby city families purchased houses and left them sitting all year round save for a few weeks in the year. There was no benefit to local communities while competition among non locals for properties led to inflation, causing the price of homes in some parts to rise beyond what younger locals could afford.

These concerns actually caused some councils from 2002 to introduce "locals only" discriminatory legislation. First Clare, followed in degrees by Kerry and Wicklow, put "locals only" clauses into their development plans which stipulated that only those with roots in the area would be granted permission for new dwellings.

After the crash, "locals only" legislation seemed beyond meaningless. Homes in remoter parts of rural Ireland collapsed in price to levels not seen since the Germans dominated the segment.

The rural holiday home markets only started to again revive in 2013 in better parts, while most areas picked up in 2014. Some remain flat. Most rural locations still offer reasonable value with decent three-bed cottages in need of work available in some scenic parts for well under €100,000.But with the upturn now seeing a new revival in interest in holiday homes by Irish buyers, two factors are combining to ensure that this time around, smaller homes could potentially become a tourism-generating engine for local economies.

First, the motorway building drive has continued to link up different parts of the country in recent years and vastly reduced the time taken to drive from cities. The improved network means more new buyers are looking to travel more often for weekends and weeks off.

Second, comes the Airbnb tsunami, giving owners a new and ready flow of tenants for down times through an online system which is easily run from a laptop or phone. With strong interest in Ireland for holidays internationally, increased occupancy can be expected going forward with potential to ensure that even the smallest converted outhouse or cabin cottage could produce a steadier stream of spend for local economies.

On top of this, the 'Airbnb factor' is likely to increasingly provide city dwellers with an added financial incentive to buy a cottage in a remoter area. In the past, the remote holiday home was often a 'money pit' which sucked up spending that was rarely recouped.

Rental in remoter areas has been notoriously difficult, but Airbnb is a democratising game changer. With Airbnb, more foreign tourists in search of the 'real Ireland' can find it for themselves and move off the prescribed and hackneyed hotel-hubbed 'leprechaun' tour trails of old.

While Airbnb bookings are unlikely to make any big profits for owners of small holiday homes in remoter parts, they will make a real difference. City folk are likely to buy such a property as a second home going forward if they realise there is potential for five or six handy lets in the year, which can at least pay for the place's upkeep.

Buyers are now incentivised by prices which are still reasonable, encouraged by vastly reduced travel times and the new promise of added income potential to kill the 'money pit' factor.

What will emerge is a dual stream of income for both city owners and local economies in remoter spots. Nationally, it means the humble rural holiday cottage is fast moving in status from being a 'blight' to a mini power-house of income generation.

Indo Property

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