The Property Market in West Cork in 2018January 5, 2019
Welcome to our review of the West Cork property market for 2018. It was a year which saw price inflation stabilise and the volume of sales increase. However, family homes remain out of reach of many and the shortage in supply of properties to let continues.
West Cork Residential Market
Price Inflation Slows
Research by Sherry FitzGerald has found that the average value of Irish established homes rose by 3.7% during 2018. This compares to growth of 8.4% recorded in 2017. According to Marian Finnegan, Chief Economist, Sherry FitzGerald;
“A review of the residential market during 2018 reveals a moderation in price inflation as the year progressed. A more limited mortgage market due to a tightening of the lending policy introduced towards the end of 2017 and to a lesser extent an improved offering in the new homes market have collectively resulted in the slowdown in the pace of inflation. As such overall price inflation stabilised to 3.7%, an indicator perhaps of a market pausing for breath after two years of above trend price growth.”
Who bought property in 2018?
The prime coastal villages of West Cork proved popular with strong buyers from the Dublin area who accounted for 19% of our closed sales for 2018. British and international buyers remain and made up 23% of our total sales.
40% of single property transactions in Ireland in 2018 did not have a mortgage attached to the transaction, signifying that these properties were likely to have been bought with cash*.
Increase in volume of sales
‘According to the Property Price Register, the volume of sales in Clonakilty and Skibbereen has already exceeded the total number of sales for 2017 with 16.5% and 18% increases respectively. Due to a lag in registering closed sales, final figures will not be known until the end of the first quarter in 2019.
Our take on the market
There are two distinct markets in West Cork, above and below €300,000. At the higher level there are indications that central bank rules limiting the majority of borrowers to 3.5 times salary along with loan-to-value restrictions have slowed price inflation in the market and this trend is expected to continue into 2019. However, the lower end of the market, below €300,000, is characterised by a larger pool of buyers with price inflation remaining an issue and there is a shortage in supply of quality family homes.
The lettings market in Clonakilty, Skibbereen and Bantry is a microcosm of Dublin and Cork without the publicity. There is a shortage in supply of properties to let. Unfortunately the evidence is anecdotal as the market is to small to derive meaningful statistics. New schemes for the development of social houses are crucial in helping solve the issue. A significant percentage of lettings units are filled with tenants under the Housing Assistance Payment. To qualify, a tenant must have a housing need. Social housing will help free up critical units. There is anecdotal evidence that market rents in Clonakilty and Skibbereen are being driven by the HAP payment levels which Cork County Council set at €450 per month for single persons to €950 per month for a qualifying family. Lettings fall between €600 and €1,100 with an extremely limited market above or below these levels. Here’s hoping that the proposed social housing schemes commence in 2019!
Country Homes Market
Sherry FitzGerald O’Neill in conjunction with Sherry FitzGerald Country Homes and Estates partnered with Christie’s International Real Estate’s 1,200 offices in 45 countries can reach an unqualified number of proven luxury consumers — worldwide.
Director of Sherry FitzGerald Country Homes and Estates, Roseanne De Vere Hunt on the past year and looking forward to 2019:
“Overall 2018 has been a challenging year for the country homes market. The uncertainty of Brexit, resulted in longer sale timelines in the UK property market with the upper end in London and also Dublin seeing considerable price adjustments which served to impact the overall unstable country homes market. From this year’s sales, buyers were primarily Irish, with few international or ex-pat buyers purchasing. A cohort of mainly Irish buyers has resulted in an extremely price sensitive market, all looking for value. Against this backdrop, vendors expectations however remain optimistic and therefore it will take time for adjustment to market conditions, leading to fewer sales. The properties most in demand were private period residences in good order, by the water, within an hour of an international airport, with land and close to a good shopping town.”
What to expect in 2019
“It is interesting to note that close to 48 companies have relocated to Ireland since Brexit. With some quality country residences coming to the market in 2019, we would hope to encourage more international/ex-pat buyers, particularly from these companies or buyers looking for a base within the EU. If there is more confidence in the market and an agreement is reached on Brexit, we hope to see a more stable market emerging in 2019. Price, quality and value will still be key for country homes sales in 2019.”
Commenting on the Country Homes and Estates market, Con O’Neill of Sherry FitzGerald O’Neill:
“We’re blessed in West Cork. The spectacular coastline interspersed with tiny inlets, rocky outcrops, beaches, islands along with the picturesque coastal towns and villages has always acted as a magnet to buyers at the higher end of the market. 2018 has proved no different. Notable sales include the spectacular ‘Red House’ Castletownshend at €900,000, Ard Na Greine, Reengaroga, Baltimore at €620,000 and the ruin in South Ring, Clonakilty on 13 acres overlooking Inchydoney for €385,000. There are a number of sale agreed properties carrying through into 2019 included Eden House, Kilbrittain (Asking Price: €945,000), Hartt House, Castletownshend (Asking Price: €850,000) and Brandy Hall House, Castletownbere (Asking Price: €595,000).
There has been a growing trend for off market sales in the Country Homes market in 2018. Vale Cove, Glengarriff sold off market for €780,000 while Gearagh House, Rossmore sold for €500,000. Vendors in some of West Corks most exclusive homes are taking advantage of a low profile marketing campaign utilising our knowledge of buyers in the market which is without equal through our connections with Sherry FitzGerald Country Homes and Christie’s International Real Estate’s 1,200 offices in 45 countries.
West Cork Commercial Market
Confidence is returning to the commercial market in the towns and villages of West Cork and if early indications are to be believed, 2019 will see this trend continue. High profile retail brands are looking at Bantry, Skibbereen and Clonakilty with quality retail space the primary inhibitor. A lack of finance from banks however is dampening the demand from within West Cork for commercial and investments opportunities.
In December we successfully sold the Clonakilty Hotel for an undisclosed sum. This is a major vote of confidence for Clonakilty. A second high profile transaction saw Boyle Sports purchase the old Permanent TSB on Rossa Street, Clonakilty.
Demand for quality agricultural land remains strong. Research undertaken by Sherry FitzGerald indicates the average per acre price of prime arable land nationally, excluding Dublin, stood at slightly under €11,200 per acre however a price of closer to €12,000 is reported for the south-west. This signifies a rise of over €250 in a twelve-month period. Land prices in the South-West, taking in Cork and Kerry, increased by 1.5% for the first nine-months of 2018***. Sales in 2018 included 38 acres in Derryduff, Rosscarbery.
* Source Sherry FitzGerald comparison of Property Price Register data to mortgage drawdown data from the Banking and Payments Federation Ireland during the opening nine months of 2018.
** Source Property Price Register adjusted for below market price sales as at 10/01/2019.
*** Methodology: A total of 51 Sherry FitzGerald Countrywide members provided values for different farmland types, namely Prime Arable Cropping Land, Prime Grassland, Marginal Grassland and Mature Forestry. These values were based on actual sales, or likely achievable sales, in their area in
the given quarter. Each region is weighted, and values at the national level, excluding Dublin, are calculated based on the addition of these weights. These weights are based off total value of farmland sold in each region according to the CSO.