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Northern Ireland house prices fall but not ‘collapsing’ says latest Quarterly House Price Index
6th August 2008
Most sectors of the Northern Ireland housing market have experienced significant annual falls in price and the volume of sales has halved, according to the latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive.
Most sectors of the Northern Ireland housing market have experienced significant annual falls in price and the volume of sales has halved, according to the latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive.
The survey covers the second quarter of 2008 and shows the changing state of the market, with the number of recorded transactions from 120 estate agents down 50% on a year before to 1,044.
Annual changes in house prices showed falls as high as 18.6% for semi-detached homes. The overall average price held up but this was largely because the apartment sector, highly represented in the sample, appeared to be running counter to the overall trend, buoyed up by high-profile new schemes in Belfast.
The survey is the most broadly-based and authoritative of all those undertaken in Northern Ireland. Its authors Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown of the University of Ulster, said: “This survey highlights that some sectors of the housing market are experiencing appreciable rates of price decline though the overall picture when balanced out suggests that there has only been a 4% reduction. But the main impact on the market is in the volume of transactions which have been more than halved over the year.”
The overall average price of a house in Northern Ireland in the second quarter was £226,934. The survey report said this fall of 4% showed a “dramatic change of sentiment” from a year previously when house prices were going up on average at 51% when the market was at its peak.
The report said: “While a correction in the market is taking place, it is important to stress that price levels have not collapsed and the marking down of prices appears to be incremental rather than a one-off correction.”
The economist Alan Bridle, Head of Research at Bank of Ireland Northern Ireland, said: “The survey shows that price changes vary widely across different parts of Northern Ireland and across the types of properties, so people should be cautious about making over-simplistic judgments. For instance, there are different factors affecting both the resale and the new-build markets.
"There is no precedent in this region forwhat is happening in terms of a genuine housing cycle, so we are on a journey through the unknown - which itself is feeding the uncertainty. However, with a very quiet resale market, I believe there is a high probability of the average price dropping closer to the £200,000 level before the end of year, with a period of adjustment stretching into 2009. Anyone looking for the green shoots of recovery should keep an eye on transaction levels which are likely turn before prices do - but it might be a while."
The Housing Executive’s Head of Research, Joe Frey, commented: “ There is no doubt that Northern Ireland’s housing market is facing a challenging time, but at the same time the current situation provides Government with an opportunity to accelerate the building of social and affordable homes, thereby helping both developers – by providing them with guaranteed cash flow – and the many households waiting to access a social dwelling or purchase their first home. ”
Property Types
On an annual basis, there were price falls in all property categories other than apartments.
The sharpest reduction was in semi-detached houses which were down by 18.6% to £196,166.
Semi-detached bungalows fell by 12.5% to £181,040.
The averages both for terraced/townhouses, at £176,915, and for detached houses, at £311,804, were down by 10.5%.
The average sale price of detached bungalows, at £300,844, declined by 2.1%.
In the apartment sector the average price rose by 21.3% to £238,449 but this sector continued to be influenced by high-profile apartment schemes in Belfast. There was a high representation of newly-built apartments in the survey, which masked the overall decline.
Location
Regional analysis showed that price reductions were happening in almost all areas of Northern Ireland.
However, in Belfast - with its busy apartment market - the average house price of £247,648 was still up 3.3% compared to the second quarter of 2007. While detached houses as well as apartments were up, there were sharp falls in other categories.
North Down’s average of £251.526 was down by a relatively modest 2.3% over a year.
The average price of £230,2430 in Lisburn showed a significant drop of 17.3%.
In East Antrim the overall average of £190,133 represented a 7.8% fall over a year.
The average in the Antrim/Ballymena area was £209,820, a drop of 8.1% over the year.
In Coleraine/Limavady/North Coast, the average price fell significantly, down 26.5% to £203,728.
In Derry/Strabane the volume of sales was well down but the average price showed an increase of 16.7% to £221,227, influenced by a good performance by detached homes.
Mid-Ulster had an average of £201,746, representing an annual decrease of 16.8%.
In Enniskillen/Fermanagh/South Tyrone the average of £193,406 was a decline of 20.8%over the year.
The average in Craigavon/Armagh of £185,016 was also sharply down by 20.1% over the year.
In Mid and South Down, the average price of £236,480 was just 2.4% lower than a year previously, partially influenced by a strong rise in apartment prices.
© Bank of Ireland 2008
