Average home costs 11.5 times annual salary, says report
Average house prices in Northern Ireland are now 15% higher than in the Republic, but wage levels are 25% lower, according to the results of an economic survey which were published today.
The report was released by Davy, a leading Irish stockbroking firm, to coincide with its announcement that it is setting up shop with an office in Belfast.
Davy is hosting a reception in Belfast this evening at which local business and civic leaders will hear details of the company's expansion plans.
The key points of the economic survey were:
- The Northern Ireland housing market is over-valued.
- The average house price now equates to 11.5 times annual income.
- One in three employees works only part-time, which reduces the potential of the economy.
- Northern Ireland needs more investment from hi-tech multinationals.
- Average earnings in Northern Ireland are £21,663 per annum, compared to £27,254 in the Republic.
Mike Irvine, head of Davy Northern Ireland, said: "The demand for wealth management services across Northern Ireland has increased significantly over the past two years, reflecting the exceptional growth of the economy.
"We have found that high net worth clients are continually looking for new and more sophisticated investment opportunities and ways to invest."
On the housing market, the Davy report said that prices here, which soared by 59.4% year on year in June, were now "highly speculative".
It added: "Average house prices are now more than 11.5 times annual income. We think UK prices are going to soften in the next couple of years and Northern Ireland's ratios look more stretched than anywhere else in the UK."
Although unemployment was at a record low level (3.4%), too many workers were not putting in a full day.
"Part-time workers account for 34% of the total in Northern Ireland, compared with only 18% in the Republic," said the report.
"Amazingly, almost as many females work part-time as full-time. In the Republic there are twice as many full-time females as part-time.
"The Northern Ireland economy is not maximising its potential as long as labour input is curtailed by the number of people working half-days."
The report said industry in Northern Ireland was not benefiting from the expansion of the European economy, with output having fallen by 2.2% year on year in the first quarter of this year.
Margins were being squeezed in the textiles sector, while food, drink and tobacco were "really suffering".
Davy Northern Ireland will be based at Donegall Square North in Belfast, where it will initially employ a staff of six investment advisors and supporting staff.