2022 was a bumper year for the prime country home market, according to property advisor, Savills Ireland, with €198m worth of transactions taking place – the highest level since the Property Price Register was introduced in 2012.
Using Property Price Register data, Savills examined prime country home transactions, which are defined as transactions greater than one million euros and located outside of Dublin, the major regional cities, and north Wicklow.
Comparing last year with 2021, total transaction values increased by 48% from €134m to €198m. Interestingly, with the average value remaining at approximately €1.5m, the increase was driven by more transactions taking place in 2022, with 130 compared to 86 in 2021.
The comparison with the pre-covid era is even more pronounced, with €65m and €99m taking place in 2018 and 2019 across 46 and 49 deals respectively.
International buyers accounted for 43% of deals, while cash buyers remained the dominant financing arrangement, with 90% of buyers in this market segment acquiring properties without financing agreements, up from 87% in 2021.
James Butler, Head of Country Agency at Savills Ireland commented:
“Prime country homes continue to be in strong demand as remote or flexible working is now a viable working pattern for many. Furthermore, buyers in this segment of the market are likely to be in more senior positions so are granted more flexibility in how they allocate time between the office and working from home. Changes to where and how people work have made country living more viable for these more established workers who may not be required to be in the office all the time. This helps explain the extraordinary boost in sales volumes witnessed in 2022 and is likely to be a feature of the prime country homes market this year and beyond.”
Commenting on the number of international buyers in the prime market, Mr Butler said:
“International buyers remain a key demographic in the prime segment of the market, especially those with more significant links to Ireland. They tend to be Irish nationals who now live abroad and want properties close to where they grew up, or international buyers brought up abroad who want a connection to family roots.
“For US-based buyers in particular, the strength of the dollar has driven demand – and with that, we’ve witnessed an 87% increase in US visitors to the Savills.ie website over the past 6 months.”
Where are purchasers buying?
Cork County is the most popular location in Savills analysis of prime country home transactions, making up 28% of all purchases.
Catherine McAuliffe, Director, Savills Cork commented:
“The coastal town of Kinsale on the southern coast of Cork was the country's most popular towns in this housing market segment, making up 9% of transactions. Kerry has been another very popular destination where buyers from US and Germany have been extremely active.”
The second, third and fourth most popular locations were Kildare, Wicklow, and Waterford.
James Butler, Head of Country Homes at Savills Ireland commented:
“These locations likely highlight the movement of households away from County Dublin to benefit from homes with better amenities and space, all facilitated by a more flexible work culture in many of Dublin’s largest employers. Buyers in this market segment prioritise living standards and amenities over location.”
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Top 10 Prime Country Homes Sales 2022 (€1m+) % by Location |
|
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28% |
|
14% |
|
13% |
|
8% |
|
6% |
|
6% |
|
4% |
|
4% |
|
3% |
|
3% |
Outlook
According to Savills, structural changes in how we work and what families want from homes are undoubtedly boons to the market. The shift towards remote working has changed the demographic of buyers, leading to preferences shifting towards modern or recently refurbed units that meet more contemporary living styles. Stock that meets this criterion is limited in Ireland, with build cost inflation and regulation around changes to these historic homes are impeding refurbishment of existing older stock. This lack of supply and change in preferences is widening the pricing gap between properties that meet these requirements, those that can feasibly change and the rest. We foresee this price discrepancy continuing as country living becomes more appealing to a greater number of people.
Macroeconomic headwinds may provide some turbulence to the broader housing market, as higher interest rates impact affordability. The prime country home market should be relatively well-shielded from any ill effects in this regard, as cash purchases make up the majority of purchases. Negative sentiment might slip over from the general housing market into the country homes market as buyers question if this is the time to move. International buyers remain a key cohort for the country homes market, and US buyers may increase their presence. The strong dollar, which effectively discounts prices paid in euros, is a factor that may encourage buyers to purchase and boost sales in 2023.