Strong and steady sales for 2002

AUCTIONEERS dislike property booms as much as the next person, contrary to popular belief, and all of the Kerry agents interviewed for the year’s review expressed satisfaction with 2002’s steady market.

The finance minister’s intervention in December last year helped fuel renewed interest from investors and pushed those sitting on the fence to move, creating buoyant sales in the lower end of the market.

Ministerial interventions aside, it’s the county’s new Development Plans that seem to have put the cat amongst the pigeons in all areas but particularly in South Kerry.

An area economically dependant on tourism, new planning policies are hotly contested by agents, such as Mark Daly of Sean Daly and Co of Kenmare.

The popular Treasure Island TV show finalist, auctioneer by profession, doesn’t take a remote view of the future of the Kerry region now that the blanket ban on one-off housing has been put in train by Kerry Co Council.

According to this estate agent, this will have an immediate negative effect on the holiday home market (with tax driven holiday homes already hit by Budget 2003) and will filter down to the micro-economy of the region. As he sees it, lack of new developments coming on stream will place increasing pressure on the existing stock of houses with the result that local people will be priced out of the market.

This view is supported by Eddie Barrett of North’s. The former president of the IAVI has trenchant views on this contentious subject and feels the current trend against one-off rural housing is unconstitutional.

“The guys who went into the GPO, all 170,000 of them, would be disappointed at the lack of civil rights in this country,” he says and goes on to add that it should be a fundamental right to live in the country, if you so choose.

Already the market is showing the state of play with sites without planning permission selling for 50-60% less than those without restrictions and an increase of up to 20% or more on site values in 2002, according to Mark Daly.

Residential sales in South Kerry have done well with growth of between 8-10% in house prices. Lower and mid-range houses are selling consistently well but the market at the upper end is static, says Daly. Demand is still strong, although house prices in Kenmare would, by their nature, be above the average in most cases, with the danger that locals will be priced out of their own town, cautioned the agent.

In Killarney, the residential market has been better than in previous years, says Michael Coghlan of Sherry FitzGerald Coughlan, and this was spread evenly throughout the year.

He predicts a slowdown in the first half of next year, or even into the last quarter of 2003, because of the residual effects of the now-altered Part V of the Planning Act.

Demand at the lower level is very strong, he says, with a marked entry into the market by the investor. Killarney has a high demand for rental properties with rents of €750 to €850 per month being achieved.

Growth has been in the order of 10-12%, in the residential market, he says, but he forecasts an average growth of between 5-6% next year, with perhaps, some upward pressure in the first half, as supply falls, but he adds that this should level out before the end of the year.

House prices in Killarney town are in the region of €210,000 for the average property and this is higher than the average in Tralee, where Eddie North quotes a price range of €140,000 to €150,000 for a three-bed semi.

The mid-range market is generally good in the county with prices ranging from €150,000 upward, but again, the supply of second-hand homes is slow, a phenomenon witnessed nationwide. The upper end of the market is limited, according to all the agents interviewed and those that sold well were specific to area, but most agreed that a good house of a decent size in a good area would always be in demand.

However, the luxury end of the market, in holiday homes as well as the residential sector, certainly suffered from caution in the face of slower growth.

Again, sites achieve a premium in all areas and in Killarney, Michael Coghlan agrees that an increase of 20% in 2002 is accurate - prices on average in the Killarney area are in the region of €190,000 to €222,000 for an average plot.

Commercial property has held its own generally, but the sale of bed and breakfast accommodation in Killarney was hardest hit in the turn-down. However, the loss in the equity market saw some investors moving into commercial property and most agents in the Killarney and Tralee forecast growth in the sector for the coming years.

Tralee in particular has seen a strong knock-on effect from the Manor Retail Park, says Donal O’Connell, which has attracted more shoppers to the area.

Growth in the residential sector has been strong right up to Christmas with most agents optimistic for the property market in Kerry in 2003. All greeted the watering down of Part V of the Planning Act as a positive step and they forecast an increased supply to the market as a result.