The price of the average house in Northern Ireland fell by almost 9% in the third quarter of this year alone, 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 survey showed prices had fallen more than 15% from a year previously.

It also confirmed a huge slowdown in transactions, with only 670 sales recorded for the whole of Northern Ireland in July, August and September – less than half the volume experienced in the third quarter of 2007.
 
This was the sixth consecutive quarter of low sales activity and the report said the impact on the estate agency sector was significant, with at least 10% of firms in the survey panel reporting no sales during those three months and many other offices having fewer than five.
 
The survey is the most broadly-based and authoritative of all those undertaken in Northern Ireland. It covers 120 estate agents and records all open-market transactions, not just those involving mortgage lenders.
 
It showed the overall average price of a house in the third quarter this year was £203,775 compared to more than £250,000 in the third quarter of 2007.
 
While the weighted rate of decline across the market was 15.1% over the year, some property types saw much greater falls, with detached bungalows dropping by almost 30% and semi-detached bungalows falling by almost 28%.
 
Apartments represented 31% of the total transactions and prices rose by 10%, influenced by the new building activity in Belfast and despite developers discounting the price of new property.
 
According to the authors of the report - Alastair Adair, Stanley McGreal and Louise Brown – the survey reflected one year of the credit crunch.
 
They said: “The impact has been severe on the local housing market with prices down considerably. In addition the volume of transactions has been eroded further, notably in the resale market where many sellers are adopting a wait and see approach.”
 
The economist Alan Bridle, Head of Research at Bank of Ireland Northern Ireland, said: “Northern Ireland's journey to more affordable housing continues in terms of the ratio of house prices to earnings - a welcome development for many - but the price reductions to date have not been accompanied by an increase in market activity.  
 
“The market remains in the grip of a negative mindset, with the outlook for further falls. We could see a decline towards around £175,000 in the average house price during the first half of next year."
 
The Housing Executive’s Head of Research, Joe Frey, commented: “It is important to keep things in perspective.  The ‘irrational exuberance’ of the eighteen months before the summer of 2007 was a serious aberration in terms of the longer term development of a sustainable housing market.  The market is currently undergoing a significant correction.  We need to ensure scarce resources are focussed on providing a safety net by building enough new social dwellings and alleviating the pain of those directly affected by the downturn, through for example the proposed Mortgage Rescue Scheme”.

Property Types
 
On an annual basis, there were price falls in all property categories other than apartments.
 
The sharpest reduction was in detached bungalows, down 29.7% over a year to an average of £235,138.
 
Semi-detached bungalows fell by 27.9% to £159,093 and semi-detached houses dropped by 26.9% to £177,864.
 
Terraced/town houses fell by 24.7% to an average of £150,149.
 
Detached house dropped by 17.5% to an average of £304,944.
 
In the apartment sector the average price of £226,068 was still 10.2% higher than in the third quarter of 2007.
 
However, the picture in the third quarter alone showed all house prices falling. In just three months detached bungalows fell 21.8%, terraced/townhouses by 15.1%, semi-detached bungalows by 12.1% and semi-detached houses by 9.3%. The lowest quarterly falls were in apartments, down by 5.2%, and detached houses down by 2.2%.
 
 
Regional performance
 
A regional analysis showed markets characterised by falling prices and low sales volumes. Low sales levels made it difficult to interpret the trends in some areas.
Belfast overall fared better than most other areas because of the relative strength of the apartment sector. The city’s average house price of £244,834 was down only 5.2% over the year. While terraced/townhouses fell by 29.5% and semi-detached houses by 20%, the apartment sector’s average price levels were still 20% above the third quarter of 2007, in spite of price-reductions being offered by developers in the new build market.
 
The highest priced city location was south Belfast, followed by the east, west and north of the city.
 
North Down’s average house price of £205,692 represented a 26.3% fall over a year. The third quarter showed how the decline was accelerating, with prices down 18.2% over the three months.
 
The average price in Lisburn dropped below £200,000. In the third quarter it was £194,597, down 31.6% over a year. Over the quarter the average fell by 15.5%.
 
In East Antrim the overall average of £167,022 represented a fall of 25% over a year. In the quarterly time period, the average price dropped by 12.2%.
 
The average in the Antrim/Ballymena area was £178,079, an annual decline of 19.9%. The third-quarter drop of 15.1% alone showed how quickly market conditions were tightening.
 
In Coleraine/Limavady/North Coast, the average price fell significantly over the year by 35.5% to £184,508, with a third quarter decline of 9.4%
 
In Derry/Strabane the volume of sales was very low, limiting the analysis. The average price of £209,050 was down 5.5% over a quarter but represented an annual increase of 12.5%.
 
Mid-Ulster’s average house price of £164,317 represented an annual fall of 43.9%, with the drop in the third quarter of 18.6% demonstrating the very difficult conditions.
 
In Enniskillen/Fermanagh/South Tyrone the average of £169,103 was a down 11.6% over the year, a more modest drop than other areas. The quarterly fall was in line with this figure, but low sales levels made further analysis difficult.
 
The average house price in Craigavon/Armagh of £162,534 reflected a fall of 32.7% over the year. The quarterly drop of 12.2% showed the deepening impact of the credit crunch.
 
In Mid and South Down, the average price of £217,358 was down by 16.9% over a year and in the third quarter alone showed a drop of 8.1%.
 
House Price Index
 
The long-term house price index, calculated relative to the base quarter for the survey in 1984, now stands at 774.02, a sharp decline from its peak. The report shows that the spike in Northern Ireland house prices occurred in mid-2007, with prices seeming to fall away as quickly as they had increased.
 

Ends
 
   
Notes to Editors:      
 
TABLES            

Performance by Property Type
 

 
    Market sector   
Annual change
  Average Price  Quarter3    
  Terraced house   -24.7%   £150,149   
  Semi-detached house   -26.9%   £177,864   
  Detached house   -17.5%   £304,944   
  Semi-detached bungalow   -27.9%   £159,093   
  Detached bungalow   -29.7%   £235,158   
  Apartment   10.2%   £226,068  

Average house price by region
 

 
  Location    Average Price  Quarter 3     
  Northern Ireland -All   £203,775   
  Belfast - All   £244,834   
  North Belfast   £158,583   
  South Belfast   £263,840   
  East Belfast   £243,995   
  West Belfast   £144,930   
  North Down   £205,692   
  Lisburn   £194,597   
  East Antrim   £167,022   
  L'derry/Strabane   £209,050   
  Antrim/Ballymena   £178,079   
  Coleraine/Limavady/N. Coast   £184,508   
  Enniskillen/Fermanagh/S.Tyrone   £169,103   
  Mid Ulster   £164,317   
  Mid & South Down   £217,358   
  Craigavon/Armagh   £162,534  
 
Media contacts:             
 
For University of Ulster: David Young, Press Office, University of Ulster 028 90 366178
 
For Bank of Ireland: Catherine Agnew at SMARTS 028 9039 5500
Julie Sherlock, Bank of Ireland +44 (0)28 90433520
Sandra Grandison, Bank of Ireland +44 (0)203 201 6509
 
For NIHE: Imelda McGrath or Jim Murray 

For further information, please contact:

David Young
Telephone: 028 90366074
Email: David Young