The most comprehensive survey of residential property in Northern Ireland has produced evidence of a significant increase in house sales in the first quarter of this year, although it showed that the average house price continued to fall.
The latest University of Ulster Quarterly House Price Index produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, showed the number of transactions recorded by 110 estate agents between January and March rose to 925 compared to only 684 in the last quarter of 2010.
The overall average price of a house in Northern Ireland in the first quarter was £143,918, a decrease of over 15% on the same time a year ago. This figure is particularly influenced by the volume of sales in the sub-£150,000 market with two-thirds of all sales falling into this bracket. Quarterly performance is also weaker, with a weighted price decline of 5.8% in the first quarter compared to the last three months of 2010.
The authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton – said the survey showed the local housing market was still in a state of flux.
They said: “The increase in sample size indicates a greater level of activity in the housing market during the first quarter of 2011 but average price levels are still lagging. As demand levels consolidate it is likely that prices will start to firm up later in the year.”
Referring to the annual decline of more than 15% in prices, the authors said that stronger conditions had prevailed in the first quarter of 2010 prior to the UK general election. Since then, they said, the housing market had had to operate within a different economic, fiscal and policy context.
The authors suggested there was some effect from house re-possession sales where properties tended to be sold at highly competitive prices. They also noted the market varied considerably across Northern Ireland with lower declines and evidence of stability in some areas within Belfast and the Greater Belfast Metropolitan Area commuter belt, and Lisburn. The levels of sales in the Provincial areas are by comparison significantly lower in numbers and pricing remains more volatile.
Alan Bridle, UK Economist, Bank of Ireland UK, said: "While there is no certainty we have yet reached the absolute trough, it is clear the residential market is now more affordable and more aligned to incomes. However, the outlook for the remainder of 2011 is likely to remain challenging against the broader economic canvas with budgetary pressures on public, private and household sectors and the mortgage industry adjusting to new regulatory realities. More positively, the pressure for immediate interest rate rises has dissipated"
The Housing Executive’s Head of Research, Joe Frey, said: “The upturn in the number of transactions is a welcome step in the process of normalisation of Northern Ireland’s housing market, and is hopefully the first sign that the downward drift in house prices is coming to an end. However, it is important that we do not provide an overly optimistic view of short-term developments. It is important that we re-build buyer confidence on the basis of sound research and analysis”.
Property Types (see table)
Performance across different types of property was highly variable but reflected the overall decline in average prices.
The annual performance – comparing quarter one 2011 with the same quarter in 2010 – showed that terraced/townhouses fell by 25.3%, partially influenced by repossession sales; detached houses fell by 19.7%; apartments by 17.7%; semi-detached houses by 6.9%; semi-detached bungalows by 7.1% and detached bungalows by 6.7%.
Regional performance (see table)
Not all parts of Northern Ireland showed the same trends. Some areas are more buoyant in the current survey, notably South and East Belfast, Lisburn, Mid Ulster and the Derry/Strabane region.
South Belfast remained the strongest area, with an average house price of £201,272 while north Belfast had the lowest average of £91,308.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, declined to 531.51. The pattern of the index since 2009 has shown uneven recovery in the market and the report says the fluctuating pattern is likely to continue through 2011 as the market seeks to stabilise.
Notes to Editors:
Performance by Property Type Q1 2011
Average house price by region Q1 2011
Northern Ireland -All
Belfast - All
Mid & South Down
Note to Editors: the full report is available for download at:
For University of Ulster: David Young, Press Office, University of Ulster +44 (0) 2890
For Bank of Ireland: Alan Watson or Catherine Agnew SMARTS +44 (0)28 9039 5500.
For NIHE: Imelda McGrath or Jim Murray +44 (0) 28 9031 8700