Property Investor

This was the summer that the holiday-home set took stock and realised the non-monetary value of their boom-time purchases

THE ongoing recession and banking crisis continue to scupper the beleaguered property market, but surprisingly, it has had a positive knock-on effect on the holiday-homes sector. Letting agents in some of the most popular tourist areas have reported a considerable improvement in business this summer as families made greater use of their holiday homes and investors found it easier to let their rental properties.

The increased number of families who chose to stay in Ireland this summer has undoubtedly been prompted by a desire to forgo an expensive overseas holiday at a time when money is tight and there is continuing uncertainty about job security. During the boom, a continental holiday was as much a ritual for many families as Sunday lunch. It didn’t seem to matter that these same families had invested heavily in holiday homes in Ireland. A depressing run of bad summer weather allowed them justify breaks on one of the Spanish costas.

No one seems to have forseen that a change of climate was on the horizon, one that has altered lifestyles and undermined wealth. For many it’s been back to basics in the holiday resorts of Clare, Galway and Kerry.

One estimate puts the overall number of holiday homes around the country at more than 50,000, many of them built between 1995 and 1999 – when special tax breaks were made available in 15 seaside towns and villages. The scheme was intended to give a boost to the resorts but, as a Government report later found, it ended up damaging the unspoilt beauty of many of the areas.

Westport has, happily, retained its charm and character and, according to local estate agent Peter Tuohy, more people than ever used their holiday homes this year. It was also notable, he said, that families spent longer than usual in their holiday homes and many also availed of midweek discounts and last- minute deals in local hotels.

Three-bedroom houses in Westport have been renting at €600 to €800 per week, while holiday apartments have been making €500 to €700. Like other resorts, property values in Westport have taken a serious hit over the past two years. Tuohy’s estate agency, Tuohy O’Toole, has a number of two-bedroom apartments for sale in The Harbour Mill at prices from €120,000 to €200,000.

Charlie McCarthy, the doyen of the estate agency business in West Cork, says that for the first time in many years, the roads in the area have been “chock-a-block” – mainly with UK-registered cars following the opening of the ferry service between Cork and Swansea. One British couple, clearly smitten with the beauty of west Cork, viewed a €700,000 house near Union Hall last week and completed on the purchase the same day. McCarthy says holiday home bookings have been the best for years, with houses in Baltimore renting from €400 to €1,000 a week.

Though the Salthill area of Galway has had a particularly busy summer, local agent Maureen McKeown describes the demand for short-term rental properties as “adequate rather than runaway”. Many owners retained use of the homes for part of the holiday period and in some cases also allowed relatives and friends to use them. The Salthill-based agency is currently marketing a two-bedroom apartment in the immediate area at €190,000. The only drawback is that the unit and its basement car parking space carry an annual service charge of €1,800. Ouch.

The increased number of families holidaying at home this summer has also boosted the tourism business in Carrick-on- Shannon, Co Leitrim. Local estate agent Liam Farrell of DNG O’Farrell says owners of holiday homes “seem to be taking stock of their lives” and spending not only their

annual holidays but extended periods in the resort. Some families rented apartments for the entire summer season at an average of €400 per week. Two-bed apartments in Carrick-on-Shannoon can be bought from €100,000 to €150,000.

There was also good news from Co Clare, where rental properties in Lahinch have been heavily booked at €550 to €650 per week. Local estate agent Michael Leyden says there was a huge increase in the footfall in the town this summer, but it was noticeable that a lot of visitors were “having lunch out of the boot of their cars to save money”. How times have changed.