When Fort Royal Country House hotel in Rathmullan, Co Donegal sold under the hammer last weekend for €530,000 to a Belfast couple who are going to convert it into a 929sq m (10,000sq ft) house, it was an eye-opener in terms of the value that can be found outside Dublin . With property prices in Dublin creeping up again due to a shortage of supply, €530,000 will now barely get you a four-bed semi in some mature suburbs.

The 11-bedroom hotel was built in 1805 by Charles Rae, a British navy officer, and has more than six acres of magical gardens, including a front lawn that leads down to the beach, and three converted, self-contained cottages that were used as holiday lets.

It had been run as a small but elegant three-star hotel by the Fletcher family since 1948, and had an award – winning restaurant, but the business closed two years ago. Next to Rathmullan House hotel, Fort Royal also has a tennis court and nine-hole pitch and putt course overlooking the sea as well as an arboretum and a walled garden. And as if that wasn’t enough, a 204sq m (2,196sq ft) detached manager’s house was also included in the sale.

According to Paul Franklin of Franklins auctioneers, four parties had an interest in the property but bidding at auction only reached €530,000. He says he is not that surprised the new owners bought it as a private residence, “as the hospitality industry has suffered in the area in recent years”.