Local housing market showing signs of recovery
Published: Wed, 14 Aug 2013
Quarterly House Price Index for the second quarter of 2013 released.
The report found that the volume of sales has been sustained at a reasonable level for the second consecutive quarter which suggests a tentative improvement in the Northern Ireland housing market.
The report produced in partnership with the University of Ulster and Bank of Ireland shows an overall average price of a house in the second quarter – April, May and June – was £130,864, virtually unchanged from the previous quarter (£131,128). However, when taking into account the mix of housing types covered in the survey, the report recorded a weighted decline of 7.6% over the year.
The survey covered 1,409 open market transactions from a network of estate agents, a sample size which is highly comparable to that of the first quarter, suggesting a certain momentum in the housing market.
The report cautioned that performance across Northern Ireland remained vulnerable to negative events and news.
The authors of the report - Professor Alastair Adair, Dr John McCord, Professor Stanley McGreal and Dr David McIlhatton said: "The sustained improvement in the volume of transactions in the survey indicates momentum in the market and although the overall average price is virtually unchanged over the quarter, the stabilisation of price levels has - according to estate agents - led to an increase in first-time buyer activity."
With a significant percentage of properties within the lower price bands, the report notes the affordable price structure of housing in Northern Ireland. Nearly three quarters of the total sample (74%) sold at or below £150,000 while 41% of properties sold at or below £100,000. The authors saythese lower price bands are important in providing potential first-time buyers with a range of affordable housing.
Alan Bridle, UK Economist at Bank of Ireland UK, said: "Six years on from the peak of the price boom, there is encouragement in this survey with the pick-up in sales and average prices largely unchanged. The more positive trends from the mortgage and labour markets of late should be supportive of steady, if unspectacular progress for the rest of 2013 and into 2014, notwithstanding continued variable performance in local markets."
Our Head of Research, Joe Frey, said: "It is not surprising that given the ongoing challenges in the labour market the housing market remains rather flat. However, the availability of the new mortgage guarantee based Help to Buy scheme in Northern Ireland from January 2014 may just provide a small but significant impetus to house prices in the new year.”
There were wide variations in performance between the different property types. The strongest performance was for detached bungalows up 16.2% over the year to an average of £148,342 while terraced/townhouses increased by 6.5% to £86,216.
In contrast, semi-detached bungalows fell 25.3% over the year to an average of £103,394, detached houses declined by 13.9% to an average of £199,553, semi-detached houses saw a drop of 10.6% to £120,377 while the apartment sector fell 9.9% to £97,765.
Regional performance (see table)
Prices continued to be variable at a regional level, which for certain regions is due to the limited evidence base. Some parts of Northern Ireland saw a significant increase in price while others saw considerable falls.
Lisburn is the highest priced area in Northern Ireland while North Belfast was the least expensive.
In Belfast the volume of sales at 423 was largely consistent with that for the first quarter (440). The overall average price of £138,043 was lower for the year - down by 13.7% and with all property types lower over the quarter and annual timescale it suggests price recovery has stalled here in the second quarter.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, fell to 467.88. The gap between the house price index and RPI is now at its lowest since the end of 2003.