With its long and painful history of dramatic booms and equally spectacular busts, Ireland is one of those rare countries in which strong property price rises are not necessarily a cause for celebration. Which is why a recent stream of data showing the Republic is currently enjoying the kind of capital growth that the United Kingdom can only dream of – prices outside Dublin rose 11.8 per cent in the 12 months to June, while in the capital they rose 11.1 per cent according to the Central Statistical Office – has not acted as an instant starting pistol for international buyers.
But there is compelling evidence that this time around the story of the rise and fall of the Celtic Tiger might be different. This is partly because Ireland is in a strong position to benefit from the fallout of Brexit. And partly because the crude headline figures disguise a far steadier, more sustainable kind of bottom-up growth, coupled with strict fiscal management, which could finally mean one of Dublin’s magnificent townhouses or a sporting estate in Wicklow is a sound investment as well as a marvellous lifestyle purchase.
According to Barry Connolly, associate director of Savills, the wide and verdant streets of Ballsbridge have long been “the dark blue square on the Monopoly board” of Dublin property. Its popularity is based on its location two miles southeast of the city centre, its good range of shops and restaurants, and the excellent reputation of its schools. Around 70 per cent of the buyers in this upscale enclave are Irish, the rest from overseas. UK buyers working in Dublin are key, and Connolly has also noticed an uptick of entrepreneurial expats returning home in advance of Brexit. Investors from the UK, Russia, Hong Kong and North America are also starting to sit up and take notice of a city where they get far more bang for their buck than they would in London and where they are more hopeful of capital growth. “With the growing economy, Ballsbridge offers great potential for financial companies relocating from the UK because of Brexit,” says Connolly.
This wide spread of demand is counterbalanced by a lack of supply. Sites for new developments are rare. Supply is further stifled by owners who bought properties during the last boom who are still languishing in negative equity.
This imbalance has pushed prices up around 10 per cent year on year in this primest of prime suburbs, says Connolly. Buyers currently pay around €1,000 per sq ft for one of its fine Victorian villas, or from €800 per sq ft – the lower price reflecting their lack of outdoor space – for a terraced townhouse.
Knight Frank is currently selling an elegant Victorian five-bedroom townhouse in the heart of Dublin 4 for €4.15m. Nearby Savills has an end-of-terrace redbrick house with four bedrooms plus a staff bedroom, priced at €5.95m. The shortage of stock leads Connolly to confidently predict that “anyone who gets into the market now will see 18 to 24 months of pretty much guaranteed price growth”, although growth cannot be sustained indefinitely. As new homes start to trickle through, and price rises help local owners out of negative equity into a position where they can sell up, he expects the supply famine will ease, and price growth will steady.
Around a half-hour ride by DART rail from central Dublin are a trio of affluent commuter hotspots that are having a quite different post-recessionary experience: Dalkey, Sandycove and Killiney.
These picturesque coastal resorts are where those who tire of city life aspire to move on to, particularly if they can find a house with a sea view and direct water access. Commutability and good schools make them popular with a family market but, unlike some commuter satellites, they are far more than just comfortable dormitories. “It is very much to do with having a lovely villagey atmosphere – they have all got a very nice selection of shops, restaurants and bars,” explains Rosie Mulvany, who heads Sherry FitzGerald’s private clients department.
A family home in one of these coastal enclaves would cost between €2.5m and €3.5m, with homes on the water commanding premium prices. Sherry FitzGerald is currently selling one of Dalkey’s landmark homes, a castellated seafront house with a private harbour, priced at €8.5m.
These resorts are an almost entirely owner-occupier market, and buyers tend to be either Irish or returning expatriates. They are bolstered by buyers from Europe, North America and Hong Kong, who work for one of Dublin’s many aircraft-leasing firms, or one of the tech companies – including IBM, Google and Facebook – which have offices in the Irish capital.
This time around buyers are not having to compete for overpriced property in the way they would have done in the years leading up to the 2007 crash because prices along this stretch of golden coastline, points out Mulvany, are currently static. Because despite what headline national price growth figures suggest, beyond Dublin, Ireland’s price surge is currently largely contained at the lower reaches of the property market, in counties such as Mayo, Roscommon and Galway, where first time buyers are out in force.
In her prime suburban patch Mulvany sees a slower, more sustainable sort of growth, which might get more of a boost from Brexit over the next few years. “If Dublin continues to attract businesses, then things can only go up,” says Mulvany. “It is probably too early to tell, but there is certainly talk of big financial companies basing themselves here.”
With the sea on one side and the Wicklow Mountains on the other, it is hard to imagine a more geographically blessed location than Greystones. Some 20 miles south of Dublin it is a classic “outer commute” hotspot: Ireland’s answer to Surrey, complete with a healthy sprinkling of golf clubs.
Here, The Burnaby neighbourhood, built for retired British army colonels and generals, is the alpha address, where fine Edwardian villas with large gardens are priced between around €1m and €2m for a five- to six-bedroom property, and are again magnets for young families. Lismara, one of these sprawling detached houses, with five bedrooms, is currently on sale with Sherry FitzGerald for £1.45m. Derrick McGovern, managing director of McGovern Estates, agrees with Mulvany’s verdict: the market in Greystones is healthy rather than escalating. “There is a good steady turnover of stock.”
Part of the reason for this aura of calm is a change in national policy. Mindful of previous boom-bust cycles the Central Bank of Ireland recently introduced a minimum 20 per cent deposit for all but first-time buyers to rein in wild house price growth in the middle and upper echelons of the market. Borrowing, meanwhile, is limited to 3.5 times income. These restrictions will prevent the seesawing market of old, while allowing room for healthy price growth. “Ireland had a 60-65 per cent price drop during the recession,” says McGovern. “We have grown 35 to 40 per cent but are still 20 to 25 per cent off peak values, which I think is a good place to be.”
Beyond the thrall of Dublin the prime market is also looking healthy, rather than overheated. Set on opposite banks of the Shannon at the south end of lovely Lough Derg, the twin towns of Ballina and Killaloe are traditionally beloved of second-home owners and the international band of commuters who work in Limerick City. “The towns are renowned for their good food and drink, and it is just a very cool area,” says Roseanne De Vere-Hunt, head of the country homes department at Sherry FitzGerald. “If you go up at a weekend it is busy and thriving.” Buyers, she says, can come from anywhere. “The last house I sold on the lake had three bids from buyers from Singapore, Dubai and an expat returning from the USA,” she says. Commuters tend to want waterfront houses, and Savills is currently listing a four-bedroom house on the lough, with direct water access and just over 10 acres of grounds, for in excess of €1.495m. Meanwhile buyers based in Dublin are also keen on living around the lough. For a three-bedroom waterfront cottage, they will pay between €700,000 and €800,000.
A more rarefied sort of holidaymaker is the ultra-high-net-worth North American, often with an Irish heritage. They are less concerned about location and tend to seek out a “palatial country pile” in the sticks, says Mulvany. And there are few more palatial country homes than the seven-bedroom Luggala, in Roundwood, Wicklow – currently on sale with Sotheby’s International Realty for €28m. This romantic piece of 18th-century gothic sits within a 5,000-acre estate, which also includes eight lodges and cottages within the grounds.
One thing that unites Ireland’s prime urban, coastal, and rural markets – and differentiates it from the prime UK market – is that location and architecture are all. Interiors tend to be comfy rather than chic, and specifications practical rather than luxurious hotel standard. “Irish style is not over the top or blingy,” says De Vere-Hunt. “The Irish certainly would not want anything that resembled a hotel. In the country they tend to spend more on the outside of their houses and they wouldn’t choose a pale carpet because they will be coming in with their muddy boots. They are family homes, not showcases.”