Talking Property: If the National Spatial Strategy is implemented, one could see regional country property prices catching up with the Leinster market over the next two to five years, writes David Ashmore.
Property continues to be a hot topic of debate, which is no surprise, given that urban prices have been growing year-on-year at average rates of 12-15 per cent. With the trend set to continue in 2004, where can someone looking to buy a premium property in the current market as an investment or a home find the best value for money?
If you compare the rates of growth of country properties with similar sized urban-based homes, the pace has been steady at 5-6 per cent but not rising anything as quickly as the city markets.
Value for money and opportunity are the two factors fast becoming associated with country properties outside the greater Dublin catchment area.
For many, the lifestyle options offered by country family living has influenced the choice of relocating from the city with some combining owning a country home with a city centre apartment.
There is also an increasing number of Irish people returning to Ireland seeking a property, not necessarily city-based, that offers quality of living and ample space at reasonable prices.
A recent study of the market by HOK Country shows that the further one moves away from the Dublin area and its surrounding 50 km hinterland the more you can maximise your budget.
With Dublin and the surrounding counties - such as Kildare, Meath and Wicklow - accounting for approximately 40 per cent of the population, it is no surprise that the greatest demand and highest prices for country properties are generally found in locations with access to this area.
Currently, 60 per cent of country sales in the €1 million-plus market are Leinster-based. Meath tops the market with 14 per cent, Wicklow with 12 per cent and Kildare with 9 per cent. Other popular counties include Wexford with 8 per cent and Westmeath with 6 per cent.
With demand currently higher in Leinster relative to the rest of the market, it does not represent the same value for money as other parts of the country. However, the trend is starting to change, with quality period houses on larger acreages outside the greater Dublin catchment area growing in popularity.
So where is value to be found for a country property and what would be a good investment? The areas which currently offer relative value for money include Connaught, which currently only holds 11 per cent of the €1 million-plus market and the northern counties of Donegal, Leitrim, Cavan, Monaghan, parts of north Louth and Longford. Parts of Munster are also relatively undervalued including Kerry, Waterford and Co Limerick.
In terms of choice, start with where the regional airport is based. Consider the areas cited for development under current Government policy (National Spatial Strategy and National Development Plan), such as commitments to build new roads, develop regional centres for education, hospitals and so on. Also, it is worth factoring in those areas earmarked for decentralisation. It is no surprise that, in the majority of cases, the areas all overlap.
With regional airports in Derry, Donegal, Sligo, Mayo, Galway, Shannon, Cork, Waterford and Kerry, and daily Dublin flights and routes to the UK and Europe offered by many, buyers are starting to realise the feasibility of using a regular commuter flight service to Dublin.
Being based in the capital mid-week and heading back to Galway or Sligo at the weekend is becoming a very viable and popular option. With airports across the western seaboard from Derry to Cork now offering regular, relatively cheap commuter services, a regional base is now a lot easier to get to with a good stock of well-priced country properties available.
Mid-market properties, such as rectories, glebe houses and farmhouses on a small piece of land and/or in need of repair, offer good value for money. Larger quality period properties on good acreage are always in demand, as they do not come to the market as often with less stock available.
If the Government's National Spatial Strategy is implemented, coupled with the National Development Plan for greater regional infrastructure development, one could see regional country property prices starting to rise and in some instances catch up with the Leinster market over the next two to five years.
HOK Country would ultimately expect to see more balanced regional demand and, in the long term, less price differential between the surrounding Dublin area commuter belts and the rest of the country. There is a good stock of houses available throughout Ireland but there is not the same level of interest as typically seen for properties based the in midlands/eastern region. We expect that this trend will continue to change over time.
Country properties offer value for money and, for many, offer a better quality of life when compared to the Dublin residential market. An increasing number of Irish purchasers can combine country living with city working.
If the Government keeps its commitment to greater regional and infrastructural developments with more economic growth, we will see market forces redressing the current uneven demand for country properties. There will be a greater drive to buy properties in reasonably well-serviced regional areas.
As well as the current Irish interest in country living offering improved quality of life and value for money, it is possible that there will be increased overseas demand with EU enlargement. This will open up the market to high-end buyers from Eastern Europe, seeking reasonably-priced period homes in the Irish market.
David Ashmore is senior negotiator with HOK Country
