Anyone browsing popular property website Daft.ie during Christmas might be surprised to see a Ballyhaunis house listed at a monthly rent of EUR1,450, a figure more commonly seen in Galway or even Dublin.
Granted the property is a lovingly restored old period home in Abbeyquarter – with a B level BER rating suggesting comfort and warmth. But the average rent for a house in Mayo is now EUR800 per month, an increase of EUR200, or 33 percent, in three years.
The EUR1450 price tag is “out of synch” with the Ballyhaunis market given prevailing wages, said local real estate agent John Higgins. He noted the going rate for a furnished three bed semi-detached house in the town is EUR800 to EUR850.
“There’s definitely a lack of supply, and there will be into the foreseeable future,” predicts Higgins.
Unusually high rents are a “false economy and it’s not clear how long it can last,” said Higgins. However he also believes more and more rent pressure may force major industrialists to rethink staffing strategies for their local operations if affordable accommodation becomes too scarce.
While EUR800 may be the going rate for a semi-detached house in Ballyhaunis lettings on a shared occupancy basis yield more. Three bedrooms in a 1980s type bungalow on the outskirts of the town were advertised recently on Facebook for EUR90 per week each, netting in excess of EUR1,000 a month for the lessor.
The shared multi-occupancy rental model may be what is required to house a large migrant workforce staffing the town’s large food processing and manufacturing bases. It’s often stated that the town supports 2,500 manufacturing jobs, with much of the general operative positions being filled by Brazilian and Eastern European workers.
Various individuals spoken to for this article were unanimous on the difficulties in finding accommodation in Ballyhaunis. All of them didn’t want to speak on the record for fear of alienating a landlord.
Take Viktor, one of the recent wave of Ukrainian workers recruited to work at Dawn Meats. He spends twenty percent of his EUR2000 monthly pay packet on rent and utilities. EUR50 per month goes on rent for a room in an apartment he shares with four others in the centre of the town.
Viktor is happy with his current accommodation –his second home in the year he’s spent in Ballyhaunis. “I am happy, its’ warm and clean. Before I lived in a house in the town and paid EUR45 for a room, and more for bills. The walls were black with damp. There were mice. It was not possible to take a bath.”
The shortage of rental properties creates headaches for employers already struggling to find workers. The owner of a building company undertaking a project in Ballyhaunis described how a Latin American construction worker he recruited was happy with the wages but unable to find a house in Ballyhaunis or Claremorris to which he could invite his family he quit and moved to the UK. “You can’t find anyone to drive a barrow these days never mind a block layer,” said his former employer.
With the tightness of supply clearly driving prices the biggest challenge may now be the affordability of local accommodation, particularly for transient unskilled workers on minimum wage contracts.
Founder and managing director of Cashels Engineering, Peter Cunnane has watched rents rise from a standard EUR400 per month for a house a decade ago to a current EUR 650 for a two bedroom apartment and EUR 550 for a one bedroomed apartment. While Cashels and similar engineering firms retains a skilled workforce on higher wages Cunnane foresees potential challenges for unskilled worker on minimum wage rates in other industries if rents continue to rise. “The question is are the rents being asked affordable in relation to the wages being paid?” Cunnane asks rhetorically.
Local businesses are wary of the long term impact of rising rents. A major local employer, speaking off the record, said “it is difficult in general to find rental accommodation around Ballyhaunis and has been for a few years. It hasn’t stopped anyone we have hired from taking up a position with us yet though, but it will later in the year I think.”
Clearly the competiveness of local industry is at stake if an affordable supply of accommodation is lacking. It’s worth noting however that nationally Ireland still remains to the lower end of the EU average when it comes to overall housing costs. A survey by the EU’s statistics body Eurostat shows that five percent of the Irish population report spending more than two fifths of their disposable income on housing, similar to the figure in Poland –whereas the figure in Germany (urban and rural) was 20 percent.
Demographic changes in the workforce mean the rental shortage could be a long term issue for Ballyhaunis. Cashels Engineering has seen a marked demographic change in the local workforce over the past two decades. A largely local talent pool of school leavers trained on state apprenticeship programmes dried up with the greater emphasis on third level education that has come to permeate Irish society.
Now up to 90 percent of local secondary school goers choose to go on to third level, explained Cunnane. “It’s no problem finding a design engineer but not so easy to find a welder,” he explained. That forced local companies like Cashels to look further afield – it was one of the first to recruit welders in Poland, before the country had joined the EU.
Increased economic prosperity in Poland however means that country’s workforce has, like Ireland’s, also emphasised university degrees. This in turn has forced many Mayo manufacturing companies to look to Brazil and India for skilled operatives, explained Cunnane. He noted that there are now approximately 100 Brazilian families in the wider Ballyhaunis area, from a dozen only a few years ago.
What of new green field housing supply? Ballyhaunis needs another housing estate, said Gerry Coffey, an estate agent living on the outskirts of the town and trading in Williamstown. “But first it has to be established if there’s sufficient capacity in the sewerage system and in other utilities,” he added. The town’s sewage system is indeed “almost at capacity” said local councillor John Cribbin.
John Higgins meanwhile sees higher house prices as another factor reducing rental supply in local housing estates as buy to let investors seek to cash in on investments. “More absentee landlords have come to the market, selling their houses. But these are being gobbled up by owner occupier demand [rather than renters]. So this doesn’t alleviate the problem.”
A plethora of government schemes to increase housing supply include grants for purchaser-occupiers of vacant properties as well as cash supports for the conversion of vacant over-the-shop accommodation for rentals.
There has however been “no impact” thus far from government schemes for subsidised renovations, said Higgins. He believes that the incentives have yet to outweigh sentimentality, though recent renovations of several properties on Knox St by new landlord owners would suggest that may be changing.
“In smaller west of Ireland towns houses are often left vacant,” said Higgins. “They are in families for decades. It’s a sentimental thing, they don’t want to let it go outside the family. A couple of decades ago the town was buzzing because the families lived over the shop. There was a great atmosphere.”
Higgins last year predicted prices would rise by 8 to 10 percent in 2021 but they rose by 15 to 16 percent. “I am predicting prices will rise by five to seven percent this year,” he said.
Higher prices and government incentives may not necessarily bring more of the older housing stock to the market, notes Higgins who predicts a five to seven percent increase in local property prices this year compared to 2021 (last year prices in Mayo rose by 19 percent on 2020 figures, according to Daft.ie).
This may be down to a strong jobs market and the transitory nature of the rental demand as immigrant workers come and go. Ballyhaunis rarely had a large surplus of rental properties, said Cunnane. Even during the more recent recession there was plenty of employment locally, he explained. In the past two years the local stock of rental properties has continually been added to, with a range of formerly commercial properties also converted to residential use by landlords responding to market demands. But demand is outstripping supply, said Cunnane: “if you need a two bedroom apartment you can’t get it.”
And yet lower prices in Ballyhaunis –cited alongside Castlerea as the two cheapest locations for property in Ireland according to data published by the Central Statistics Office in January 2021 – may have added to the demand for houses among those priced out of other locations. “Remember Ballyhaunis is coming from a low base rate,” explained Higgins. “Prices are still below comparable prices in Claremorris and larger towns.”
Lower prices have drawn international buyers too. A Belgian buyer who works from her bungalow in the Curries area outside the town having looked at properties across the country. “We wanted a house with three beds, big garden, outbuildings a plus, which would not be located on a main road.
“We went from Kerry to Mayo, and what decided us for Mayo was the better value for money compared to other counties south-west. Our top three choices were in Mayo…We ended up buying the one that was a best match for the price and situation, and Ballyhaunis seemed ideal for us because of it being so multicultural.”
I notice whenever I walk past the windows of the estate agents in town how cheap the houses seem to be here compared to elsewhere in Ireland…I don’t think I could have found a house like ours for this price anywhere in Belgium.”
The shortage of rental property in Ballyhaunis meanwhile brings other, worrying, pressures. John Higgins is this month doing an audit of his houses after receiving reports of overcrowding in some houses where the original tenants have brought in more occupiers without the landlord’s knowledge. “This is problematic from an insurance and from a Covid 19 point of view,” said Higgins. “It’s very worrying for landlords.”
Article first appeared in the Western People January 2022