PICTURES: Ireland's cheapest house has a sinister reason behind its €12,500 price tag

Ireland's cheapest house, this three-bedroom property in Donegal listed for just €12,500, is up for auction later this month - but there's a justified reason for its incredibly low price tag.

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7 Radharc An Seascan, Dungloe, Co. Donegal

Nestled in the Donegal countryside, an online search at the time of writing revealed the three-bedroom semi-detached property to be the cheapest house available to buy in Ireland with an AMV of €12,500 ahead of the online public auction on November 9.

The accommodation briefly comprises an entrance hall, lounge, kitchen/dining area on the ground floor, and three bedrooms and a family bathroom on the first floor. The property benefits from an enclosed garden to the rear and off street parking, as well as being a vacant possession.

However, the property is located in Radharc An Seascan, a 15-house estate at Meenmore overlooking Dungloe Bay. According to Donegal Live, the estate was largely completed in 2007-8 and sold mostly to people as holiday homes and investments. Now it's known locally as the 'Titanic site' due to the fact it's sinking into the ground it was built on.

In fact, within a year of completion of the estate, the entire site suffered serious subsidence because it was built on a peat bog. The owners say the subsidence caused water pipes in the houses to break, damaged central heating and drainage/sewage systems, caused steps and ramps to detach from walls, and tarmac to sink. Holes up to a metre wide have appeared on the site, posing a serious danger, particularly for children.

Most of the owners, who paid between €155,000 and €190,000 for the houses are reported to believe all the houses should be knocked because they could not be economically repaired.