Commuting: Loosening belts

The commuter belt counties of Kildare, Wicklow, Meath and Louth have not only seen an increase in the number of houses being sold in the first half of 2014, but also in the amount of money spent on properties.

Sales grew by 48 per cent in Wicklow, 46 per cent in Kildare, 38 per cent in Meath and 27 per cent in Louth when compared with the same six-month period last year. While these counties are coming off a lower base than the capital, they are experiencing the same upsurge – and facing similar issues, most notably the lack of quality housing stock close to major transport links.

The issue of supply and demand has been the main contributor to the increases, and with little happening in terms of new builds, the problem is not likely to be solved any time soon. Meath-based auctioneer Ronan McKenna, of Raymond Potterton Auctioneers, in Navan, said it is simply not feasible for developers to build at present despite there being a demand for new homes.

“The costs associated with construction are so high that they’re above what it would cost to buy a three-bed semi. Until the cost of a three-bed hits €200,000, I just can’t see it being viable for anyone to build,” says McKenna. “There’s just no financial benefit in it for them between the new regulations and by the time they pay council contributions etc.”

The same problem exists in Louth, according to Drogheda auctioneer Shane Black. “When the planning costs, contribution costs and the build costs are all taken into account, it’s hard for a developer to make money. Build costs haven’t changed a whole lot from the boom years, so if it was costing you €170,000 to build a new home then that’s fine when you’re selling them for €300,000-€400,000, but when they’re now selling for €190,000, there’s just not the money in it by the time you pay VAT.

“The 20 per cent of homes that go to social and affordable housing also kills a site and the reality is there is no huge incentive to make building economically viable at present.”

Kildare has similar problems, with very little built in Naas in recent times, according to Will Coonan of REA Coonan. “The treatment plant in the town is at capacity, and as a result no planning permission has been granted for any development for a number of years now. I believe a contract is being awarded at the minute though to rectify that problem so hopefully things will improve,” he says.

Wicklow, however, is bucking the trend somewhat, with Derrick McGovern of McGovern Estates, in Greystones, reporting a number of new developments arriving on the market shortly, with plenty of building earmarked for 2015.

Kildare Kildare has traditionally been the most active of the counties along Dublin’s commuter belt. A myhome.ie study of the Property Price Register shows 649 houses were sold in Kildare between January 1st and the end of June, a 45.5 per cent increase on the same period of last year

The amount of money being spent on property is also up, with €139.3 million spent in the first six months of 2014, up a 67.9 per cent on the same period last year.

Like Dublin, stock remains an issue. Naas, which was the most popular area of the county to buy a home last year with 163 transactions, saw sales fall in the first half of 2014, from 55 in the first six months of 2013 to just 51 this year – a drop of 7.3 per cent.

Other areas to record falls in the number of sales were Leixlip (-83.3 per cent), Kill (-50 per cent) Athy (-39.3per cent), Kilcock (-33.3per cent) and Monasterevin (-33.3per cent). But there were more positives than negatives. Newbridge, the most popular area to buy a house in during the first half of the year, recorded 68 sales – an increase of 23.6 per cent on last year. Also on the up was Maynooth, with 56 sales in the first six months of the year – up 43.6 per cent from 2013.

Local estate agent Will Coonan of REA Coonan in Celbridge and Maynooth says the upturn in the economy has helped turn things around. “Probably since around about the turn of the year we have stopped going backwards as a country, and it’s amazing how much of an effect that has on people from a psychological point of view.

"North Kildare is always popular with locals," he says, "but there's also interest from a high percentage of commuters and a lot of them are in some way connected to the west of Ireland. They like the fact that there are good rail links here, while it's also easy to access the M4 and M7.

“It’s predominantly first-time buyers and trader-uppers that we’re dealing with. Investors are not as active. The issue we have is that there are more buyers than there are units. All the new homes supply gets snapped up pretty quickly and it can be difficult to get planning permission for sites elsewhere. Continued on page 32 Meath A look at the Property Price Register shows that there were 525 transactions in Meath in the first half of the year, up 38 per cent on the 381 for the same period of 2013. The amount of money spent on property is also on the rise, with €95.1 million spent in the first six months of 2014.

Like Dublin, stock is affecting further growth. Navan, for example, was the most popular place to buy a home in Meath last year, with 212 sales. While 104 sales between January and June means it is on track to match that, an increase of 6.1 per cent on the 89 sales for the same period of last year is relatively small growth.

Other areas saw bigger increases though, most notably Bettystown, which recorded 32 sales in the first half of the year, up 540% from the five for the same period of 2013.

Other notable increases were recorded in Trim (97 per cent), Slane (80 per cent) and Ratoath (58 per cent), although Duleek (-40 per cent), Oldcastle (-27 per cent) and Ashbourne (-15 per cent) had only declines to report, with stock an issue in these areas.

According to Navan-based auctioneer Ronan McKenna of Raymond Potterton Auctioneers, the increased interest can be partly attributed to an influx of commuters looking for more value. “It’s not so much people looking to get on the ladder but people looking to trade up into a bigger house. They’re now balancing the cost of the commute versus the quality of house they can get.

“The current rise in prices is purely because stock is starved. It’s still a bit early to say people are coming out of negative equity and that is affecting things. At the height of the boom houses were selling here for €330,000-€340,000 and that fell to around €100,000-€110,000.

“Now they’re roughly selling for €160,000-€180,000, so there is a long way to go for those people to get back into positive equity again.

“We’re back at a 2000 base, and houses are selling at below their build cost, and no matter what happens they shouldn’t fall by that much again.

“People are being attracted here because there’s only so long they can live at home and interest rates are still quite low. You can also probably buy a very comfortable house in Navan for the same price as you would rent up the road in Dublin,” said McKenna. Louth Good transport links and a rise in multinationals trading in Louth is helping the county make big gains in the property market. While growth in Louth is the lowest of the four commuter counties, it has experienced some strong gains in the first half of the year. A look at the Property Price Register shows there were 409 transactions in the county between January and June, up 26.6 per cent on the same six-month period of 2013. The amount of money being spent on property is also on the rise with €49 million spent in the first six months of 2014, up 18.4 per cent on 2013.

A lack of good quality housing stock is impacting further growth, with the county’s two major towns of Dundalk and Drogheda recording little or no growth in sales in the first half of the year. Dundalk, for example, was the most popular area to buy a home during the first six months of 2014, but its 131 sales were down 4.4 per cent on the same period last year. Drogheda sales grew by 1.7 per cent to 119, but both of these figures show Louth’s urban centres are crying out for more new houses, as well as additional stock.

Dundalk aside, the only notable decline was in Carlingford where sales dropped by 20 per cent in the first half of the year. Outside of that there were increases in Collon (120 per cent), Castlebellingham (75 per cent), Ardee (36 per cent), Dunleer (33 per cent) and Blackrock (27 per cent).

More rural areas are thriving, but Drogheda-based auctioneer Shane Black of Shane Black Property Advisors & Agents says interest is greatly outweighing supply in the towns. “Certain areas of Drogheda are up by between 15-20 per cent since the turn of the year, particularly along the Dublin Road.

“We sold two four- bed semis in one estate last year for €200,000; now the same houses are selling for €240,000-€245,000. The Dublin Road is doing well because of its proximity to the train station, because Drogheda is really a suburb of Dublin now.”

With recent jobs boosts in the north of the county being led by PayPal and Ebay’s continued expansion in Dundalk, local auctioneer Brian Carroll of Sherry FitzGerald Carroll says workers at those facilities were also anxious to put down roots. “Anything that has gone up for sale in the last six months has been snapped up,” he says.

“Development land is attracting a lot of interest and we’ve had over 150 acres of it traded in the last number of months within the town area.

“You can see the spin-off from the jobs in PayPal and National Pen already. Investors now see Dundalk as a safe bet because of the large number of multinationals here. Both they and buyers are looking for a good standard of housing, and in a lot of cases they want new homes in Earlsfort and Carlinn Hall.”

Wicklow Of all the commuter belt counties, Wicklow looks to have the best prospects heading into the next few years. Having already leapfrogged Meath for the number of sales it has achieved in the first six months of the year, the county is one of the few in the vicinity of Dublin where stock is more readily available, if not yet plentiful.

Interest in the Garden County is always assured given its transport links, close proximity to the capital and stunning natural beauty. However, it is the number of new developments planned for it that is setting it apart from others. Even before they come on stream, things have been going well with sales and transaction values continuing to rise in the first half of this year.

According to the Property Price Register there were 537 sales in the county between January 1st and the end of June, up 47.9 per cent on the 363 for the same period of 2013.

There was also €140.5 million spent on property in the first half of the year, an increase of 57.8 per cent.

Bray was the most popular town during that period with 96 sales, an increase of 7.9 per cent, but the biggest increase came in Greystones, where there were 77 transactions, a 133 per cent increase on the 33 from a year earlier.

It’s an active market, and Derrick McGovern of McGovern Estates in Greystones is anticipating a “very busy autumn”, adding that the problem of supply is not as bad in Wicklow as elsewhere, with signs of it improving soon. “We’ve a lot coming on the market in the next month and quite a few other instructions in the pipeline.

“I think a little bit of the fizz has gone out of the pent-up demand that was there. It’s still very busy but it’s hard to see the increases continuing at such high rates and they may level off.”

A number of new developments earmarked for the area also mean that supply should become more readily available soon. “Beside our office is a site with planning permission sought for 14 new houses and there have been a number of other sites sold around Greystones too.

“Once the IDA park in Greystones is at full capacity it will cater for 5,000 hi-tech jobs and that will lead to further development at the Marina.

“This is an area designated as an area for growth in the National Spatial Strategy so the future certainly looks busy and a new major data centre between Greystones and Newtownmountkennedy will only lead to more interest in the area,” he says.