Prices Rising As Housing Market Shows Signs of Recovery
A rising volume of house sales and a quarterly increase in prices in the last three months of 2013 is further evidence that the housing market is showing positive signs of recovery, according to the latest University of Ulster Quarterly House Price Index produced in partnership with Bank of Ireland UK and the Northern Ireland Housing Executive.
The number of transactions recorded by the survey in thefourth quarter of last year - October, November and December - rose to 1,758. While the increase was only slight, the previous quarter’s sales volume was the largest since the market peak in 2007.
The report highlights rising transaction levels which supports the general view of greater vibrancy in the Northern Ireland market.
The average house price in the final quarter of last year was £132,922, a weighted increase of 2.7% over the third quarter. Although the average price was still down on a year previously, the report said the quarterly rise suggested that price levels were starting to respond to growing demand in the market.
The authors of the report - Professor Alastair Adair, Dr John McCord, Professor Stanley McGreal and Dr David McIlhatton – said: “A further rise in transaction volumes and evidence of rising prices in the final quarter of 2013 would suggest we may be witnessing an end to the effects of the lengthy downturn in the residential market in Northern Ireland, although there remain significant variations across the region.”
Northern Ireland now has a highly affordable price structure, the report said, with 4 in 10 houses selling at £100,000 or below. Altogether, 70% of house sales during the quarter were sold for £150,000 or less. The report’s authors noted that this makes Northern Ireland a relatively low priced market offering potential value for money for purchasers.
Alan Bridle, Economist at Bank of Ireland UK, said: "The latest survey offers further evidence that 2013 was the year of ‘bottoming out’.
“While local markets will inevitably stabilise and recover at different paces, there is a healthy momentum for Northern Ireland as a whole coming into 2014, with the outlook for transactions, average prices and mortgage volumes more favourable than compared to recent years."
The Housing Executive’s Head of Research, Joe Frey, said: "Affordability remains a key issue for lenders and policy makers. We hope that the new composite Measure of Affordability developed in partnership with University of Ulster, which takes into account deposits and not just house price to income ratios,will provide a more nuanced insight into the on-going challenges faced by first-time buyers, by lenders and indeed by policy makers attempting to address the challenges of a very complex market.”
Compared with a year before, most property types recorded a slight reduction in average prices. However, the report said that comparing the fourth quarter with the third, this legacy from the downturn appeared to have beeneliminated. All property types, with the exception of semi-detached bungalows, showed a quarterly increase in price.
Terraced/townhouses rose by 1% over the quarter, semi-detached houses by 6.1%, detached houses by 1.5%, detached bungalows by 8.7% and apartments by 1%. Semi-detached bungalows recorded a 15.2% fall but had a low representation in the sample.
Regional performance (see table)
At regional level, price trends were again highly variable but in line with the overall performance of the Northern Ireland market, with some regions showing signs of growth. The Belfast market was again buoyant,with the volume of sales up significantly.
A significant rise in average prices in North Down made it the highest priced area in Northern Ireland with an average of £171,829, while North Belfast remained the least expensive with an average of £89,800.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, rose to 486.69, reflecting the quarterly growth in prices.
Average house price by region Q4 2013
Quarter 4 2013
Northern Ireland - All
Mid and South Down