While Northern Ireland has probably seen the worst of the housing market collapse, recovery will be slow and irregular, according to authors of the latest University of Ulster Quarterly House Price Index produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive.
The survey for the third quarter of 2012 shows that the modest price rises recorded in the second quarter were not repeated, with a slight price decline in the latest survey pointing to a market that is performing unevenly.
The overall average price of a house in the third quarter – July, August and September - was £138,966, representing weighted declines of 3.6% over the year and 1.75% over the second quarter.
The authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - said: "The results re-emphasise that recovery in the market is slow and, while there is some suggestion of improved price performance in parts of Northern Ireland and for certain property types, the overall weighted quarterly decline suggests that market sentiment is still to the downside.”
The sample number of transactions recorded across a network of estate agents for the third quarter was 958, a relatively low level of transactions reflecting the uncertain market conditions.
The report says 41% of houses in the survey sold for £100,000 or less, suggesting that considerable value exists in the local market. Overall, 72% of sales were at or below £150,000, confirming the improved affordability of housing in Northern Ireland.
Alan Bridle, UK Economist at Bank of Ireland UK, said: “The UK and global economic backdrop for the housing market in general is likely to remain difficult, while all available evidence paints a more challenging picture for the Northern Ireland economy, especially for employment and consumer confidence.
“While there are some signs of encouragement, the reality in the short term is that local market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment.”
The Housing Executive’s Head of Research, Joe Frey, said: “There is no doubt that the housing market will continue to remain subdued for the foreseeable future, due in particular to uncertainties in the labour market. Recently published research based on the House Condition Survey, however, highlights that ongoing investment in existing housing to address housing health and safety hazards would not only provide a boost to the labour market, but also lead to very significant savings for the Health Service."
Property Types (see table)
The trend across all property types was generally one of decline in the third quarter, but there were exceptions, indicating a still volatile picture. The sharpest fall was in the apartment sector, down 22.7% over the year. Compared to the same time last year, detached bungalows fell 12.5%, terraced/townhouses were down 11.7% and semi-detached houses declined by 8.5%. Two property types showed increases, with semi-detached bungalow prices up 16.1% over a year and detached houses up by 9.3%
Regional performance (see table)
At a regional level trends were again highly variable, with some parts of Northern Ireland showing signs of an uplift but other areas recording a decline. The Belfast market continued to make an improvement. South Belfast remained the highest priced area in Northern Ireland while the Enniskillen/Fermanagh/South Tyrone market was the least expensive.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, slipped to 499.49 in this survey in line with evidence of a price drop in the third quarter.
Performance by Property Type Q3 2012
Average Price Quarter 3 2012
Average house price by region Q3 2012
Northern Ireland - All
Mid and South Down