Sterling and dollar strength is delivering a boon in sales, says country homes estate agent Michael H Daniels.
At this same time last year, we speculated that 2015 had the potential to produce the most definitive year in some time for the super-prime estate market.
Heralding a positive start to the year was Tony O’Reilly’s Castlemartin Estate, selling at around €26.4 million with reports of two further €20m plus estate sales privately in the offing. As 2015 ends, it is clear that the year didn’t quite live up to its billing with the anticipated deals failing to happen.
This, in fact, was the case throughout the whole country market with a lively start boding well but failing to carry through into the second half of the year.
As 2015 entered its final quarter, the launch of the Castlehyde estate, with 150 wooded acres, provides another open market test. One of Davis Duckart’s two north Cork masterpieces, the Palladian mansion overlooking the Blackwater has been lavishly renovated and refurbished by dancer Michael Flatley over the past decade.
Although the guide price of €20m is some way north of recent records in the province, since the Fort William Estate at Lismore, sold off-market in 2012, Castlehyde is now a true one-off with only a few comparable opportunities for this sort of specification and finish existing in the southern counties.
There are, however plenty of opportunities in the mid level of the country market both open and off-market. Given the continuing economic recovery and positive outlook, allied to the fact that most buyers at this level are funded in Sterling or Dollars, (both of which have made strong gains against the Euro) logic dictates that the €1m - €3m sector has under performed.
For the first time in decades we have a benign stamp duty regime of 2% (above €1m), when compared to say the UK where rates for purchases of over GBP 1.5 m are calculated at 12 % (or a whopping 15 %, if a second home).
There would certainly appear to be more buyers making enquiries and looking to buy here than in previous years.
We may even be becoming fashionable again, with a sprinkling of rock stars and Hollywood A listers keen to put down roots, but on the hard evidence of viewing levels and registered sales this activity has not been translated.
In fact, to December in Munster, only eight country properties broke the (once more) elusive €1m barrier according to the Price Register with just one making above €2m. Better sales activity was recorded in the €500,000-€1m bracket with over 30 deals confirmed via the Register to December, with over 20 of those in Co Cork.
It is quite possible that a lack of confidence is hindering competition amongst buyers and resulting in a lack of urgency and commitment issues. Pricing is still anything but clear-cut and a cause of confusion with distressed sales — unfortunately a necessary evil — continuing to undermine stability and recovery.
The year was not without its share of macro financial factors.
Dominating the prime spring summer months, the Greek exit and bailout crisis rumbled on, causing no end of damage to confidence to the currency and bad blood between EU partners.
Stock markets had performed well until the meltdown of the Chinese stock market crash in June with aftershocks in July and August, losing most of the gains made in the first half of the year. As the overwhelming majority of buyers are foreign based both factors almost certainly dented many ambitions, raising concerns and possibly second thoughts about converting large sums into Euro.
In fairness to the ECB, it has gone out of its way to underpin the euro and counteract a deflationary spiral. Earlier this month it cut the deposit rate to a new record low of 0.30 %, causing the biggest one-day rise in the euro against the dollar since 2009.
The bank has vowed to keep printing money at the rate of €60bn per month until March 2017, pushing its radical stimulus measures to extremes not seen in any major region in modern history.
In Co Cork, West Cork performed strongest once again with Tony O’Reilly’s Shorecliffe House in Glandore reported in recent weeks to have sold for €1.5m, with Maureen O’Hara’s seaside home at Lugdine Park, Glengarriff, making around €1.4m in the summer.
Drishanepoint House, Skibbereen fetched around €1.35m and Horse Island in Roaringwater Bay around €1m. Just shy were St Olan’s at Coachford and The Anchorage at Oysterhaven.
In Co Limerick, the stunning gothic Castle Oliver, nestled in the Ballyhoura Mountains, finished in top spot overall in Munster making around €2.6m with The Demesne, Adare Manor making €1.25m.
In Co Tipperary, Kilteelagh House, on Lough Derg made around €1.35m with Quinnville Abbey in Co Clare reported to have made €1.50 m. In Co Waterford, Whitfield Court at Kilmeaden is reported sold at around €1.35m.
Nationally, sale highlights included Courtown Demesne in Co Kildare at €10m, Tulira Castle, Co. Galway at €5.80m, Roundwood Park, Co Wicklow at €5m, Capard House in Co. Laois at €4.75m and Mt Hanover in Louth approaching €3m.
Looking forward to 2016 there are certainly positive trends as the economic recovery gathers pace and wealth is once again being generated within the country. The housing shortage in the capital should generate demand for well-priced country properties as prices for top end city properties inflate.
Macro financial clouds on the horizon, that have the power to unsettle the market, include the new socialist/communist government in Portugal, elected on a mandate to end austerity together with the UK referendum on EU exit, which could be held as early as next May.
Michael Daniels is principal of country property specialists Michael H Daniels & Co, Fermoy, Co Cork, which celebrates its 20th anniversary in 2016.
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