House prices are set to keep plummeting
House prices in Northern Ireland are expected to fall further in 2011 with budget cuts and high unemployment hitting the property market, according to a survey which is due to be published today.
In a fresh blow, the report by the Royal Institute of Chartered Surveyors and Ulster Bank suggests prices are continuing to tumble — with the dip expected to drag into the new year.
It has led to calls for the Assembly to finalise a budget, with the RICS claiming greater certainty about public finances would boost confidence in the housing market.
Tom McClelland, who is the RICS spokesman for Northern Ireland, said: “Although the housing market faces numerous challenges, confidence could be helped by the Northern Ireland Executive agreeing a budget sooner rather than later.
“Many people currently fear the worst from the budget, but indications suggest that public sector job losses might not be as significant as first thought and that there might be more money available for day-to-day spending than originally expected.”
The survey also found that transaction volumes, which are already at historically low levels, will drop further next year.
The survey’s price balance — the percentage of chartered surveyors who say prices rose in the past three months minus those who say they fell — stands at -67, which is its lowest level since November 2008.
Meanwhile the price expectation balance — the percentage of chartered surveyors who say prices will rise in the next three months minus those who say they will fall — is at -50, its lowest since March 2009.
Mr McClelland said several factors are driving down the housing market.
“We are all well aware of the factors that have been impacting on the local housing market, including rising unemployment, the fear of public spending cuts, and uncertainty linked to events in the Republic of Ireland,” he said.
“And the recent freezing weather will only have acted to further deter all but the most eager buyers for now.”
The latest housing price index by Ulster Bank and University of Ulster puts the average house price in Northern Ireland at £148,243 — the first time in five years it has fallen to under £150,000.
Derek Wilson, head of lending products at Ulster Bank, said the company has introduced schemes to try to make house-buying more attractive for customers.
“We continue to see demand from first-time buyers, but it is the remortgage market where we think there is potential for a significant increase in activity,” he said.
“We have introduced measures to support remortgage activity, including doing away with arrangement fees and doing away with the need for remortgage customers to pay legal or valuation fees.
“We continue to work hard to seek out and fulfil demand and are determined to continue to introduce initiatives that support customers.”
Stormont is the last devolved administration to agree a budget. The Assembly is due to debate the proposed financial plan tomorrow.