Despite highly variable results across Northern Ireland, there are indications that some stability and even growth is returning to parts of the local housing market, 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 number of transactions recorded across a network of estate agents for the second quarter of 2012 was 931 – reflecting a continuing low level of sales in the face of difficult economic conditions.
The survey showed that the overall average price of a house in the second quarter was £139,633, a slight increase compared with the average of £134,560 for the first quarter of the year However, over the year the average price was still down by a weighted rate of annual decline of 2.4%.
The authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - said: "While there is still considerable uncertainty and variation in the housing market, this latest survey suggests that price levels are starting to stabilise and indeed during the second quarter improved performance resulted in an increase in the overall average sale price."
The variable picture showed that some types of houses had increased in price while others continued to decline. The Belfast market in general showed clear signs of recovery but in other areas house prices were still falling.
The affordability of housing has continued to improve, with 71% of the homes in the survey selling for £150,000 or less.
Alan Bridle, UK Economist at Bank of Ireland UK, said: “While a quarterly increase in the average price is welcome, there are significant variations across the region. I believe the steep market correction since 2007 has yet to fully run its course for Northern Ireland as a whole and I still expect that the average price in the survey will trend 5 to 10% lower over the next six to twelve months.
“The discounting of properties at the lower end of the market to encourage sales is likely to continue for some time and this will act as a drag on the overall average price.”
The Housing Executive’s Head of Research, Joe Frey, said “The latest survey provides some evidence of stabilisation in the market, but overall the news on the underlying economy is not good. In addition, there are still significant imbalances in the market as evidenced by the growth in the number of ‘accidental landlords’ - owner-occupiers who want to move house but can’t sell in the current market conditions and decide to move and let their previous home out for a period of time. It will take some time for these to work their way through the system”.
Performance by property type was highly volatile, with many types still falling over the year.
The sharpest fall was for detached bungalows which decreased by 22.7% to an average of £127,642.
Terraced/townhouses fell by 6.5% to an average of £80,962 and apartments dropped by 7.3% to an average of £108,458. Semi-detached houses fell by only 0.9% to £134,619.
There was a modest increase in the average price for detached houses up by 1.8% over the year to an average of £231,663.
The average price for semi-detached bungalows was up substantially by 28.3% to an average of £138,390 although they accounted for only a very small proportion of the survey.
Regional performance (see table)
At a regional level trends in the second quarter were highly variable with Belfast showing clear signs of price recovery but with many other regions and sub-regions continuing to see prices falling.
South Belfast remained the highest priced location in Northern Ireland while North Belfast had the lowest average price.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, increased to 506.49 in this survey in line with evidence of some market growth.
Performance by Property Type Q2 2012
Average Price Quarter 2, 2012
Average house price by region Q2 2012
Northern Ireland - All
Mid and South Down
For University of Ulster: Press Office, University of Ulster +44 (0)28 9036 6178
For Bank of Ireland: Catherine Agnew SMARTS +44 (0)28 9039 5500.
For NIHE: Imelda McGrath or Jim Murray +44 (0) 28 9031 8700