Northern Ireland Reaches Watershed In House Price Growth
The annual rate of house price growth in Northern Ireland slowed considerably in the third quarter of 2007 and the volume of sales has fallen sharply, according to the latest University of Ulster Quarterly House Price Index.
The Index, the most comprehensive survey of local residential property sales, which is produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, showed that priced growth slowed from 51% in the second quarter to 40% in the third.
Further evidence that the brakes are on price growth is shown by the rise from one quarter to another which slowed to 3.6% in this survey compared with the quarterly increase of 10.5% in the previous survey.
Nevertheless, with prices continuing to go up, the average cost of a house in Northern Ireland has now passed the £250,000 mark.
According to the report’s authors - Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown of the University of Ulster – the third quarter represented a watershed for the housing market.
Professor McGreal said: “There has been a clear change of sentiment reflected not only by the reduced rate of growth but a significantly lower sales volume, down by a third compared to the same quarter in 2006.
“In essence, there are still high price levels but much lower growth rates and considerably reduced sales activity.”
The Ulster survey is the broadest-based and most authoritative of all those undertaken in Northern Ireland. Its covers some 115 different firms of estate agents ranging from the largest to the smallest.
Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, said: While the market temperature has obviously cooled, the analogy of the balloon going "hiss" rather than "pop" seems most appropriate.
“In my view, the most telling statistics are the sharp drop in transactions and the evidence that prices are ‘sticky’ in most areas because they are not responding quickly to the signs of lower demand.”
The Housing Executive’s Head of Research, Joe Frey, commented: “While the sharp fall in the rate of increase in house prices was expected, there is as yet no evidence of significant falls in actual house prices. First-time buyers in Northern Ireland are therefore going to continue to become an increasingly rare species for the foreseeable future.”
The annual average growth by property sector is consistent with the overall rate of increases. It ranges from almost 35% for detached houses (average price £369,609) to almost 45% for detached bungalows (average £334,702).
In the two main sectors of the market, terraced/townhouses rose by 40% to an average or £199,392 while semi-detached homes went up 41.3% to £243,223.
Apartments increased by an annual rate of 43% to £205,178 while the average price for a semi-detached bungalow rose by 37% to £220,796.
The strongest performing sector over the quarter was detached bungalows up 8.9% followed by semi-detached bungalows up by 6.7%, detached houses by 6.1% and apartments 4.4%. In the semi-detached house market the rate of quarterly increase was only1% and for terraced/townhouses it was just 0.9%
In Belfast the average price of a house was up 50% relative to the same period last year to £258,332 reflecting the strong market in the city. South Belfast remained the most expensive, followed by the east, west and north.
The East Antrim market rose strongly by 58% to £222,759. In Antrim/Ballymena the rise was 29.7% to £222,193 while in Coleraine, Limavady and the North Coast prices went up 42.6% to £285,938.
In Derry/Strabane the annual rise was 26.4% to an average of £185,863 while in Mid-Ulster the increase was much higher at 61.8% to an average of £292,931. Enniskillen/Fermanagh/South Tyrone showed a small fall of 5.7% to £191,368 but this figure could have been affected unduly by the small level of sales in these areas.
In Craigavon/Armagh the average price of £241,410 represented an annual rise of 37.1% while in Mid and South Down prices rose by 26.1% to £261,654.
In North Down annual growth was 44.5% to £279,127. In Lisburn prices rose by just over 25% to £284,599