Northern Ireland’s housing market is showing some signs of improvement, albeit constrained, with the number of sales up and the rate of price decline slowing, according to the region’s most comprehensive survey of residential property.
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 in the third quarter of this year – July, August and September – was 1,133 compared to 1,062 in the previous quarter.
The overall average price of a house in Northern Ireland was £139,691 which meant the weighted rate of annual decline slowed to 7.5% from 15.3% recorded in the second quarter of this year.
According to the authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - the housing market is continuing to demonstrate volatility, although activity levels have improved the market is still in a state of correction from what was arguably the deepest downturn ever experienced in Northern Ireland.
“There has been renewed activity in the third quarter of the year and slightly improved average prices for a number of sectors within the market. We see a return to more normal conditions being a slow process over a period of time rather than any major short-term change in market sentiment,” they said.
Quarterly price performance relative to the second quarter of the year showed a marginal 0.1% weighted rate of increase in prices despite the presence of a significant number of low priced properties in the sample.
Alan Bridle, UK Economist, Bank of Ireland UK, said: “This survey presents a slightly more positive picture although behind the headlines a number of market dynamics are at play including some contrast in performance between parts of Greater Belfast and our provincial and rural areas and a continuing element of stock clearing, particularly of lower value properties.
“The winter months will inevitably see some seasonal influences on activity levels and it is likely 2011 will mark the fourth consecutive year of house price decline. The region is learning, at some cost, that housing market cycles are typically extended and pronounced.”
The Housing Executive’s Head of Research, Joe Frey, welcomed the report as further evidence of a more robust housing market and noted that “although first time buyers are still facing difficulties in terms of accessing mortgage finance and continuing uncertainty in the labour market, house price to income ratios clearly show that in comparison to a few years ago Northern Ireland’s housing market is now much more affordable”.
The survey, which covered some 120 firms of estate agents, showed that 69% of properties sold at or below £150,000 during the quarter, demonstrating that the price structure of the market had remained consistent during this year – an indication of stability returning to the market.
Property Types (see table)
On an annual comparison between quarter three 2011 and the same quarter in 2010, price levels were lower for most property types. However, for both apartments and semi-detached houses there was a slight increase in average sale prices over a year - apartments were up by 2.5% and semi-detached houses by 2.2%. In contrast, semi-detached bungalows fell by 20.5%, terraced/townhouse properties were down by 15.8%, detached houses fell by 12.4% and detached bungalows dropped by 13.7%.
Regional performance (see table)
At a regional level, the picture is similar to that for the whole of Northern Ireland. Belfast showed several positive indicators of a market recovery. The number of sales was again strong and prices were generally higher, with the average price in the city increasing over the year by 2.9% to £142,200. South Belfast had the highest price in Northern Ireland, while North Belfast was the most affordable area.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, increased slightly in the third quarter to 516.01. The authors said the rather tentative, fluctuating picture was likely to prevail for the rest of this year.
Performance by Property Type Q3 2011
Market sector Average Price Quarter 3
Semi-detached house £133,821
Detached house £221,288
Semi-detached bungalow £104,541
Detached bungalow £168,764
Average house price by region Q3 2011
Location Average Price Quarter 3
Northern Ireland -All £139,691
Belfast - All £142,200
North Belfast £103,146
South Belfast £196,182
East Belfast £148,358
West Belfast £119,148
North Down £174,406
East Antrim £125,491
Coleraine/Limavady/N. Coast £138,773
Mid Ulster £133,010
Mid & South Down £138,479
For Bank of Ireland: Catherine Agnew SMARTS +44 (0)28 9039 5500.
For NIHE: Imelda McGrath or Jim Murray +44 (0)
28 9031 8700