Country house market: A year in review

There is little doubt that the country market is now at a threshold, with 2015 poised to be possibly the most definitive year since 2008 crash.

Country house market: A year in review

Following a disappointing 2014 in many ways, in which the glowing embers of recovery in 2013 failed to really catch light it can be seen now that those stirrings were the early vanguard of risk takers picking up the real bargains of ‘bust & bailout’ Ireland.

As the vulture funds swooped on commercial property at below-cost fire clearance prices in NAMA land, so the well funded and risk non-averse buyer who bought in 2013 appears to be looking good as the recovery takes hold and prices at top of the country market begin to harden.

The hype of the Dublin residential market has aided the sector in Kildare, Wicklow (seven of the 19 non-Dublin homes that sold in 2014 for over €1m were in Wicklow) and Meath but there is little real evidence of solid performance elsewhere in 2014.

That may be about to change however – with increasing evidence as the year progressed of several important estate owners receiving both solicited and unsolicited approaches from agents on behalf of hungry clients. Furthermore, there are now open market opportunities such as the arrival of the Tony O’Reilly’s Castlemartin Estate (guiding €30m, and on 750 Liffey-fronting acres, 35 miles from Dublin) to provide a true litmus test. If rumours of an early deal near the guide price (via Knight Frank and Jordan prove to be true, it could herald be the beginning of a series of landmark estate deals taking place in 2015.

Confidence in this sector in post-bailout Ireland has soared. Investors like what they see on the fiscal front with the indicators positive, the current account deficit both manageable and serviceable long term once more, at competitive interest rates. The Euro currency crisis has abated and the riddle of mortgage arrears/debt forgiveness is being solved with the resulting freeing up of fresh mortgage funds to oil the gears of the market in general.

Abroad we are seen as model penitents who have come out the other side of a very nasty train wreck and are once again ‘mainstream’ in investment terms rather the wearers of ‘junk status’ sackcloth.

There are now a number of opportunities available, both overtly and via the private market at perceived ‘value’ for investors keen on safe havens for large sums and averse to little returns from poor deposit rates.

The enticement of the seven-year CGT concession has also promoted interest in many considering buying here with Irish ex- pats, together with US and UK buyers to the fore.

We are within easy reach of one of the largest concentrations of wealth in the world, the South East of the England. Whilst that region continued to boom while we languished, there are signs of a price downturn there with painful budget decisions ahead to reduce their record deficit. It is quite possible that there will a significant amount of profit taking and hence funds looking for investment outside the UK in the coming few years.

It is easy to forget there is such a huge source of potential buyers on our doorstep. A recent survey showed that only 19 properties in 2014 made over €1 million outside Dublin. A similar survey by Lloyds TSB showed that in just six months, 33 properties made over £1 million in one Hertfordshire city alone, St Albans — more than the whole of Scotland. Should even a small fraction of that wealth come to Ireland, it would have a huge impact.

Why Ireland? We still offer ‘quality of life’, seen as increasingly hard to obtain to the super wealthy in the UK. With a low rural population, lack of urban sprawl, pylons and pollution, and with the same language and a slower pace of life, Ireland is viewed a safe haven with easy access to air routes, and away from the perceived rise of fundamentalism and its attendant threats.

Perhaps as important in bolstering a true revival next year is our main competitor in the estate market - Scotland - receiving a very bloody nose in 2014, which may not stop bleeding for some time yet.

The Scottish independence referendum gave not just the UK establishment a serious fright. The closeness of the outcome and huge 11th hour effort required to prevent a split in the Union has had serious implication on the shooting and fishing estates market there.

Never have the pages of Country Life been so chock-full of prime Scottish sporting real estate as this year. The SNP’s promise of land reform and the threat of Scotland enduring a currency crisis over the Pound Sterling if the Yes vote had succeeded is the stuff of investors’ and estate owners’ worst nightmares. We know only too well about currency crises and the bitter memories attached to those dark days.

Michael Daniels is a Fellow of the SCSI and RICS and principal of Michael H Daniels & Co, country property specialists based in Fermoy, Co Cork.

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