Monday 23 October 2017

Shadow of the Tiger still haunts the golf market

New life has been breathed into the golf club residential market, but this time it’s from ordinary owner occupiers

Tiger Woods: new life has been breathed into the residential golf market.
Tiger Woods: new life has been breathed into the residential golf market.
The K Club
One of the homes at the The Inch, Mt. Juliet
The Duke house types at Carton Demesne.
Doonbeg Golf Club, which Donald Trump has recently bought
The living area in one of the Churchfield homes, close to the K Club.
Donald Trump who announced €45m plans for the Doonbeg golf course

Donal Buckley

THIS week's announcement by Donald Trump of his €45m plans for the Doonbeg golf course in Clare will give the Irish golf sector a much-needed boost.

And after six years in the rough, the conjoined market for houses on golf courses also seems to have made it back onto to the fairways – albeit only just.

They're still a long drive from the prices seen in the halcyon days of the 2006 Ryder Cup and for some golf still has a whiff of the worst of Celtic Tiger excess.

Nonetheless, estate agents report a pick-up in sales transactions for golf-course homes, and in some cases prices have been rising, but the types of buyers have changed dramatically.

There are few corporate big swingers about like Sean Dunne and Sean Mulryan, who once bought spacious, open-plan, detached houses at the K Club back when Irish business leaders treated the purchase of golf course homes in the same vein as renting a corporate box at Croke Park or the Aviva – just to lavish hospitality on financiers, major customers, friends and their executives.

Tiger buying reached its pinnacle when the K Club hosted the Ryder Cup, the famous golf competition when European golfers showed their prowess over their US counterpart and Irish business leaders announced that, like our golfers, they too were world players.

What better statement could a business mogul make than holding sway over his or her balcony with a view over one of the greens being played in the Ryder Cup?

Among the big name buyers were entrepreneur Sarah Newman and her partner, Kilkenny hurler DJ Carey, who had homes in both the K Club and Mount Juliet golf courses.

Not that every K Club buyer got sucked into the hype. At least two astute investors, singer Ronan Keating and gym owner Ben Dunne, availed of the hot market to get out at the top and make a killing. Both sold their K Club houses before the Ryder Cup saw prices peak.

But most believed they were riding a wave which would see the world's premier golf event propel Irish golf properties to the game's top ranks.

Unfortunately, within a few years, many buyers of golf houses were ruing their over-investment of time, money and enthusiasm in those little white balls. Prices fell by between 50pc and 70pc, depending on which course you lived on.

But new life is stirring in this market of late and rather than big investors or corporates, private owner occupiers have been in the ascendancy.

This spells better prospects for the golf leisure market too, as hard-pressed golf course managers have recently launched a bid to compete with the GAA and rugby clubs by transforming once-exclusive golf clubs into centres for community activity.

This means families, rather than stuffy corporate groups.

Earlier this month, international golfer Padraig Harrington launched the plan by Confederation of Golf in Ireland to attract more families, including children and wives, to play the game and avail of their club house facilities. Meantime, the K Club in in Straffan has been one of the clubs to experience increased owner-occupier activity, according to Richard Brophy of Goffs Country, who reports that he has recently sold or gone "sale agreed" on four homes there.

"Business people who had been renting homes at the club are now starting to buy there because they like the ambience, the quality of the maintenance and the security," Brophy says.

Over the last six months, four bedroom houses in the Ladycastle section have sold in the range of between €405,000 to €600,000 depending on the style and size.

During the peak they sold for as much as a million.

About five months ago, two four-bed detached Ladycastle houses sold in succession, with the second one achieving about 6pc more than the first.

But by K Club standards, Ladycastle houses appear to be relatively modest. The more exclusive Churchfield section, where Sean and Ben Dunne had their holiday houses, saw values as high as €5m during the boom. One of these, No 15, is now on the market with Goffs, with a price of €2m attached.

According to the Property Price Register, apartments have also been changing hands there for between €190,00 and €260,000 through the last year.

Willy Coonan, the Maynooth-based estate agent, says families have already bought many of the houses at Carton Demesne, headquarters of the Golfing Union of Ireland and recent host to the Irish Open golf competition.

Since July 2012, he has sold about 20 new and second-hand houses at Carton, bringing to 112 the number of houses sold since they were launched in 2005.

"While current prices are down about 50pc from their peak, over the last two years they have risen by about 10 to 15pc," he adds. These include The Duke house types which are four/five-bedroom detached houses of 2,800 sq ft priced from €645,000."

In Mount Juliet, Co Kilkenny, where Riverdance duo Moya Doherty and John McColgan were among the buyers, the number of owner occupiers is also estimated to be on the up.

Because many of these houses were originally built to the individual designs of the owners, it is difficult to compare prices.

Savills have a €950,000 price tag on 1 The Inch, a four bedroom country house with views over the river, while DNG is asking €750,000 for 5 The Inch, a five-bed, three-storey house of 557sqm.

A fraught issue however in the current market for golf course homes is high annual management service charges –especially for apartments where some facilities are shared.

These have ranged up to €3,000 a year and in addition there may be substantial club membership fees, in some cases up to €7,000, as well as annual subscription fees.

That's not as significant an issue in the Knightsbrook Golf Resort in Trim, Co Meath, where membership of the golf course and spa is included in the price but buyers pay an annual golf subscription of €850.

In addition there's an annual management fee of €200 a year for the smaller houses. Agent Anne Bannon has sold or sale agreed as many as 30 houses since last August ,with three-bedroom mid-terraced houses recently selling for between €145,000 and €165,000.

One of the advantages of Knightsbrook is its location on the edge of the town, giving it appeal for the local market.

Anne also points out that the larger houses are achieving a quarter more than similar sized houses in other parts of Trim.

So that's the new golf premium – 25pc. Out of the bunker, perhaps, but still rather a way to go for long time owners before they can finally get back on the green.

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