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House prices could shoot too low, warns RICS
Tuesday, 15 July 2008
THE Royal Institution of Chartered Surveyors (RICS) published its housing survey for June today — and pointed to continued widespread house price falls across Northern Ireland.
And it warned of the prospect of prices shooting too low in the same way they have climbed too high in recent years.
Sentiment amongst local chartered surveyors remained very low according to the study, in line with the UK-wide picture.
A net balance of 84% of Northern Ireland contributors to the RICS June survey were reporting falling rather than rising prices, compared to a UK-wide figure of 88% reporting falling rather than rising prices.
Across the UK, the average number of transactions reported by chartered surveyors is at its lowest since the RICS housing survey began in 1978. Demand is weak with chartered surveyors reporting buyer enquiries continuing to fall.
RICS Northern Ireland housing spokesman, Tom McClelland, said the local housing market continues to “experience an extremely low volume of sales activity despite asking prices having been cut aggressively in recent months”.
“Negative news flow is discouraging interest in the market, which is forcing sellers to cut asking prices further and some economists are suggesting that prices could therefore overshoot on the way down, having overshot on the way up in recent years,” he said.
The survey is sponsored by Ulster Bank. Its head of mortgages, Derek Wilson, said: “Purchase activity is low while people watch movements in the market closely. Those coming to the end of a mortgage deal or intending to remortgage should fully investigate the options open to them and speak to their lender if they have any concerns.”
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House Prices have been pushed up through what can only be described as 'Pyramid Selling' by gleeful banks, mortgage professionals, buy to letters and estate agents alike and it is time the whole market drops to become realistic and not turn people's homes into just another 'commodity'. What ever happened to 3.5 times your salary as the benchmark? I am a developer with projects on the go and I am appalled at the way the housing market has been hijacked by investors since the Stock Markets returns were yeilding very low. Houses, flats etc are just incredibly over priced and first time buyers are being saddled with £150k + of debt that will never be paid off. Now all the above will have badly burnined fingers and this lesson in greed should be bourne in mind for the future and mortgages set at a multiplier of salary with a large deposit required.
Posted by Andrew Osborne | 17.07.08, 11:05 GMT
I seriously doubt house prices will shoot low if the Belfast Telegraphs Helen Carson (Houses only ever go up) keeps trying to talk the housing market up. People like her have a lot to answer for,because she was a cheer leader dancing with her pom-poms encouraging people to get into debt taking out overprice mortgages on unrealistic wages here in Northern Ireland,to aid the property king-pins to grow fat with profits.
Posted by Gordie brun | 16.07.08, 22:58 GMT
Are low holiday prices bad news? What about low TV prices? Or low sofa prices? Why do house prices seem to have their own set of rules? And, why is it that some newspapers felt it appropriate during the boom to continually report rising house prices in a positive light? If they had done that with stocks and shares or any other investments it would be illegal.
Posted by Dave | 16.07.08, 13:40 GMT