Donegal housing market recovery running on emptySeptember 23, 2016
Demand is far outstripping supply when it comes to Donegal housing stock, particularly in Letterkenny.
The market trend is positive and continues to move in the right direction but the truth be told we’re close to running on empty.
As the banks continue to slowly release higher levels finance many house-hunters are finding there is increased competition for their ‘dream homes’. It may not quite be the rush experienced during the years of the recent ‘boom’ but there is no doubt that the dynamic of the local housing market has changed dramatically in the last two years.
A perfect illustration of the current situation was the huge response we had at Sherry FitzGerald Rainey to the new multi-house development at Lios Na Greine. In a matter of days more than 30 people had viewed the first three houses in the Lios Na Greine development at Lisnennan in Letterkenny. All three homes are now booked up with two ‘sale agreed’ and one ‘on-hold’. We even have a waiting list in operation – something we’ve had little need to employ to any significant degree for just short of a decade.
In fact, a couple of years ago getting a chance to field queries from just one person interested in viewing a property could have taken weeks.
Rising house prices are reflecting the current surge in demand with very substantial increases experienced over the last 12-24 months both in the Letterkenny area and in Donegal generally.
In Ballymaccool Woods, three bedroom semi-detached homes were commanding less than €50,000 in late 2014. Last week we ‘sale agreed’ an identical home in the same estate for €84,000.
Green shoots of recovery are certainly evident in the local housing market. There is a particularly high and increasing demand for three and four bedroom semi-detached properties in and around Letterkenny.
A major contributory factor to the hike is that many homeowners have been caught in a web of negative equity and find themselves in no position to upsize or upgrade. The knock-on effect for those looking to leap on to the property ladder is that they are left with little or nothing to choose from to match their first time buyers’ budgets.
Those who are in a position to buy but have not had their mortgages approved in advance are also finding it difficult. They often find themselves up against cash buyers who are ready to do a deal on the spot and so can’t compete because they have to go through the laborious motions of mortgage approval.
This can be a terribly frustrating situation when a buyer’s perfect property comes to market and they are not prepared.
The whole dynamic of purchasing a property has been transformed in recent times with ‘proof of funds’ now a pre-requisite in making any offer on a property. Thankfully though funding is becoming increasingly available with banks loosening their lending criteria somewhat.
The availability of finance is also leading to increased interest in boosting housing supply with new builds locally – this is good news and something which will ensure the market can grow steadily without running on empty.