If the last two years have taught us anything positive, it is that we are privileged to live in one of the most beautiful countries in the world. This came to the fore most prominently during 2021 with the influx of foreign buyers to our shores rendering the country homes market highly competitive for our home-grown buyers.
Overseas buyers account for approximately 50% of purchases in this selective segment of the market.
Irish country homes have always had an international flavour due to foreign direct investment (FDI) and the Irish-American diaspora.
In recent years, returning Irish expats, who have accumulated savings and/or equity abroad, have formed another group of potential purchasers.
There has also been a noticeable increase in second home purchasers from European markets who are attracted to the lifestyle that Irish country homes can offer. Flexible working policies are allowing these buyers to split their time more easily between city and country properties.
Many of the European buyers will retire to their Irish property in the future, while planning for the moment to spend part of the year working from home while living in Ireland.
West Cork and Kerry were popular for German buyers during 2021, while buyers from the US and Australia, many unable to travel until Q3 in 2021, were willing to have virtual walk-throughs of a property and make offers on that basis. The majority of homes ‘sale agreed’ in these areas sold in excess of their asking price due to competitive bidding from a combination of Irish buyers wanting to relocate to the country, and buyers from abroad.
More local buyers tend to be in the 50-60 age bracket considering again a home to fully retire to but for the moment a part-time go-to place for these uncertain times. Travel restrictions due to the pandemic caused buyers to rethink buying in Europe.
Many realise now that while we don’t have the attractive climates that can be enjoyed in all of those places, the beauty of our countryside and coast, the lifestyle that can be enjoyed while living there, and the ease of access versus the tribulations of foreign travel can definitely outweigh the desire to go abroad just for the sunshine.
Indeed, the part-time residence can often generate income either while the main property is vacant or from a guest house or gate lodge on the grounds, the ideal revenue-earner to cover the maintenance and upkeep of the property.
Off-market sales suit some buyers and sellers in this sector of the market, with vendors wanting discretion and buyers wanting ease of purchase without having to compete.
The fact is, they will likely pay the higher end of the price scale but they are willing to do so to ensure they get the property they desire. In this highly active market, it is still recommended to sell on the open market which offers the widest buyer net and will likely result in competition.
A strong macro economy, record low-interest rates, and comparatively low stamp duty are supporting the country homes market.
That said, cash purchases have typically accounted for approximately 85% of the entire country homes market. The prevalence of cash likely reflects the niche nature of the market, which can be subdivided into high-end and core sales. While luxury country houses will appeal to affluent purchasers where cash purchases make up a small percentage of their overall wealth, core properties are more achievable for existing homeowners looking for a cosy rural or coastal retreat.
There has been slight downward trend in the number of cash purchases as younger families with mortgages start to buy more core country homes (€500k to €1m) either as full- or part-time homes.
Sea or lake views are often a prerequisite for the country home buyer, but closeness to the coast will suffice in many cases. Property with land is often favoured, and properties with little work to be done are becoming more and more popular due to the rising costs of construction associated with both materials and labour.
Analysing the Property Price Register for transactions exceeding €1m — excluding Dublin, north Wicklow, and Ireland’s other major cities — provides insight into the preferred location of prime country home buyers.
Purchasers favour areas such as Laois, Kildare, and Meath, giving access to Dublin City and its airport, and West Cork and Kerry, as they offer a balance between the attractions of country living and access to urban centres for educational, commercial, cultural, and entertainment purposes.
Remote working policies are facilitating high-earning buyers, usually in the tech or financial sectors, to purchase in these locations, while continuing to be employed by a Dublin-based company. These locations typically offer greater value and proximity to good road links and international airports, which are increasingly important as foreign travel starts to increase again and buyers become more familiar with flexible working patterns.
So, in this changing world, buyers are spoilt for choice in the country homes market because they can now live much further away from their workplace, enjoy a more laid-back lifestyle in their leisure time, and enjoy the beauty and pleasure of our beautiful isle.
- Catherine McAuliffe is head of residential at Savills, Cork