June 02,2015

In a wealthy fishing village in Dublin, the Irish trophy home is making a comeback.

From the top of a hill close to the Irish Sea in Howth, developer Joe Cosgrave watches his team of construction workers racing to finish the granite-framed doorways and vast walk-in wardrobes at the country’s first luxury-home development since the bursting of a property bubble in 2008.

So far, he has sold nine of the Thormanby Hill houses, which have a price tag of about 1.5 million euros ($1.7 million).

“The money was always there, but the confidence wasn’t,” said Cosgrave, a silver-haired 56-year-old. “People have the confidence to go out and buy again.”

Cosgrave is banking on the return of wealthy buyers who can afford trophy properties in the wake of the worst real estate crash in Western Europe, with Thormanby Hill testing a market still in recovery. While foreigners and returning Irish emigrants have accounted for luxury-homes purchases since the crash, sellers now say they’re targeting locals.

“We’re dependent on the normal market of families trading up and down,” said Simon Ensor, who handles sales of upscale homes at Sherry FitzGerald Group, a property brokerage in Dublin. “We’re now back to the type of people who were there 25 years ago.”

Irish home prices fell by almost 50 percent after a real estate bubble burst in 2008. Values are now surging again, helped by a more stable economy. That prompted the central bank to introduce mortgage caps in February.

Sales Jump

The new curbs are doing little to deter wealthy buyers. Sales of Irish homes for more than 1 million euros jumped 41 percent to 117 during the first four months of 2015 from a year earlier, according to Sherry Fitzgerald. That’s the highest since at least 2010, the data show.

Some of the biggest spenders have been from overseas. John Malone, the U.S. cable industry billionaire, spent almost 27 million euros on Castlemartin, an 18th-century estate and stud farm in Kildare in January.

In one of the biggest residential deals of 2014, Singaporean Cynthia Chua spent almost 8 million euros on “Deepwell,” a coastal mansion to the south of Dublin built by the Guinness family in the 1850s.

“By international standards, top-end properties are relatively cheap,” said her husband, Nick Holman, who returned home last year after working abroad in finance. “They’d compare to the cost of a nice detached house in London.”

Embassy Belt

Edwardian houses on Shrewsbury Road in the heart of Dublin’s embassy belt, once home to some of the nation’s biggest property developers, are now selling to a different kind of buyer.

The National Asset Management Agency, the state’s bad bank, in April sold “Mugnano,” a 5,000-square-foot (465-square-meter) home on the road. The buyer was Aengus “Gus” Kelly, chief executive officer of Dutch plane-leasing company AerCap Holdings NV, according to two people familiar with the matter. A spokeswoman for AerCap declined to comment.

“What’s happened on Shrewsbury Road over the last five years is that all of the new guys who’d come in, they’re all gone,” said Peter Kenny, an estate agent with Colliers International, as he walked the oak-paneled floors of a mansion on the street he’s trying to sell for 7 million euros. “There’s a new set of wealthy people who are coming in to take over.”

Kenny is selling the property for creditors of developer Sean Dunne, he said. About half of the buyers of the properties he sells are Irish expatriates,” he said.

NAMA’s Support

Back in Howth, Cosgrave ponders how times have changed over the last six years, since the National Asset Management Agency took over the 500 million euros of debts he owed to Irish banks. The agency is now helping to finance the construction of his Howth development, where he hopes to build about 30 of the five bedroom, 3,358-square-foot homes.

Plenty of local Irish people can afford this sort of property, Cosgrave said, helping keep alive the business his family started in 1979.

“Some of our competitors are not in business and, thanks be to God, we are,” Cosgrave said. “We’re working through it and we’re going to keep fighting the fight.”