Are home values tied to the masts?
EIRGRID this week pledged to pay up to €30,000 to homeowners living near high-voltage lines. But for those who are threatened with such an eyesore, how accurately does this sum reflect the potential depreciation of what is likely to be their most significant asset?
How much value do you stand to lose from your home if you suddenly find yourself adjacent to a structure like a giant pylon that constitutes a nuisance or poses a health risk – whether real or perceived?
To find out, we canvassed the opinions of estate agents and value experts around the country on the deflationary effects of pylons, wind farms, landfill sites, mobile phone masts, and – in view of buyer prejudice – halting sites.
Pylons: Minus 30pc- 38pc
The government pledged this week to review the literature on the disputed health risks of electromagnetic fields. No one disputes those risks as hotly as Eirgrid itself. But auctioneers and professional property valuers all agree that whether or not people's fears are justified, it's the perception rather than the reality that causes devaluation. And up until now Eirgrid has always had a practice of not compensating landowners for devaluation.
Richard Collins, an auctioneer and consultant in Fermoy, Co Cork, has been taking compensation cases on behalf of landowners over pylons and other structures for some 35 years.
"Over the years Eirgrid has stubbornly insisted that there is no devaluation of a property by these pylons and wires. That's flying in the face of reality," he said.
In any case, only landowners with pylons actually on their property have been compensated. Neighbouring properties, even if they're similarly devalued, have not received a penny. That is "a sore point", Collins acknowledged. "It might be only six inches outside your property but you got nothing."
Eirgrid's newly proposed 'proximity allowance' allows for compensation of €30,000 to homeowners within 50 metres of a high-voltage line, falling to €5,000 for those 200 metres away. Average house prices outside Dublin now stand at €151,000, according to the CSO, so Eirgrid's maximum compensation offer amounts to just under 20pc of an average property's value.
This ties in with Collins estimation of a devaluation of 20pc to 30pc for a property within 50 metres of a pylon. But he adds that the number of potential buyers is also curtailed drastically. "There is always a customer at a price but you will certainly shrink the market, and that pulls down the price."
This is backed up by Oxford Brookes University research which found that visible high-voltage cables could reduce the number of buyers by 80pc. The study estimated devaluation even higher at 38pc for a pylon within 100 metres of a house.
Wind farms: Minus 50pc
Landowners all over the midlands are currently being signed up to allow the building of wind turbines on their lands, as part of a massive government plan to generate wind power here for export to the UK.
Residents within a mile of wind turbine clusters have reported consistent disconcerting "whooshing" sounds audible from their homes and flashes of reflective sunlight.
Substantial compensation payments and annual rents up to €24,000 are sweetening the deals for landowners. But other householders in the vicinity aren't eligible for any payments. John Earley of Property Partners Earley in Roscommon believes nothing has a more detrimental effect on property values than wind farms.
Earley estimated a cut of "no less than 50pc" within half a mile of turbines.
"I meet it all the time. You can't sell them. It's the reality of the market. If I look at your property and it's worth €100,000 on an ordinary day, I'd say I'll be doing well to get €50,000 for you."
He also thinks a vendor might lose even more than 80pc of potential buyers. "I reckon you might only get one in 20 that would buy it, and that's the truth. No one will want to be living there."
Agents in the UK suggest a more moderate reduction of around 8pc, while a report analysing data from 50,000 home sales for the US government last year found "no statistically significant impact of wind turbines on nearby property values".
Mobile phone masts: Up to 21pc
There are around 3,000 mobile masts on private property in Ireland, and the landowners are entitled to annual rents up to €10,000, depending on location. Neighbouring landowners get nothing.
Mobile phone companies object to any suggestion of devaluation.
"There is no reason why the erection of a mast should have an adverse effect on property prices," insists Meteor, pointing out that RTE's TV and radio mast "had no adverse effect on property values" in Donnybrook. A New Zealand study some years ago found that masts could hit property values by 21pc in areas where they had been controversial, but had no effect where there hadn't been much publicity about them. Both that and a similar US survey suggested that, beyond 200 metres, the effect on property values was negligible.
Ronan Lyons, Daft.ie economist and assistant professor of economics at Trinity College, has been researching the effect of various structures and amenities on property values for a paper on the economics of the crash. He found that mobile phone masts had no negative effect on house prices, and could even have a positive effect in some areas.
"The masts tend to be put somewhere with a bit of green space, so what you actually find is prices are slightly higher close to masts," he said.
However, John Earley said he knew of a property next to a mast that would be "practically unsaleable" because of its proximity. But he also said that, "once you move 200 metres away from it, you're running out of the potential of sympathy".
Landfill sites/ waste treatment plants: No Change to Minus pc
Value impact very much depends on how dump sites are managed. The community of Kilcullen, Co Kildare, is now united in battle against the Gridlink project, having already spent years fighting (successfully) against the establishment of a so-called 'superdump' in the area.
Austin Egan of Appleton Properties in Kilcullen agreed that the pylon plan would hit local property values, but said he had observed no appreciable effect from the existing landfill site in the neighbourhood.
"What we have in Kilcullen is a very well managed facility. You'd have to say it's a state-of-the-art facility. The effect on property values would be negligible," he said.
The controversial new waste incinerator at Duleek, Co Meath, opened in 2011. A local agent said it had not been in place long enough to determine its effect on property values.
However, declining property values are a very real fear in the vicinity of waste facilities, and in the US, devaluation figures of 2.7pc to 7.3pc have turned up in academic studies.
In contrast, economist Ronan Lyons' recent research suggests that, in Ireland, properties within 100 metres of a landfill site may be devalued by 0.7pc.
Halting sites: InConclusive
Auctioneers, wary of discrimination, were reluctant to discuss the potential deflationary effects of this on local property. However, they agreed that prejudice can have a tangible effect on property values.
Keith Lowe said it depended very much on the nature and upkeep of the accommodation. He said DNG had sold homes in an estate that "surrounded" a halting site in west Dublin, and had no difficulty with any of them. However, he acknowledged that having a halting site right next door could reduce your pool of buyers, and hence your price.
A survey by consultant Dr Kieran McKeown on Traveller accommodation in Dublin claimed that reports about declining property values were exaggerated.
"The majority who live in the same area as Travelling people experienced no difficulties from Travelling people and, of those who did, none reported falling property values as one of the difficulties," he found.