Housing market shows early signs of ‘return to normality’
Northern Ireland’s property market showed signs of life in March, but the number of houses being sold is still a long way from healthy levels, according to a new survey released today.
The Royal Instituition of Chartered Surveyors housing market survey, sponsored by Ulster Bank, said chartered surveyors reported an increase in both inquiries and transactions last month, indicating homebuyer enthusiasm in the province is on the up.
March is the third consecutive month that Northern Ireland chartered surveyors have reported rising levels of inquiries and transactions and respondents to the survey said they were confident that transactions would keep increasing in the next three months as people take advantage of recent house price falls and lower interest rates.
House prices are estimated to have fallen by more than 20% since the property market slide began towards the end of 2007 and banks began tightening up on lending.
RICS Northern Ireland housing spokesman, Tom McClelland noted that transaction levels are moving from historically low levels. “There is no doubt that the number of sales taking place has been on the up in recent months as asking prices have increasingly been realigned with the realities of the market. However, it must be remembered that these increases have been from extremely low levels and we are probably still some way of what would historically be considered a healthy level of transactions,” he said.
“Respondents to the survey are confident that transactions will continue to increase, which wouldn’t be surprising as developers continue to offer incentives and sellers in the resale market increasingly accept realistic offers. However labour market conditions are deteriorating and this will likely act to moderate the further recovery in sales levels,” Mr McClelland added.
Derek Wilson, head of mortgages at Ulster Bank, said the data from the RICS survey backs up anecdotal evidence from estate agents who said buyers had returned to the market in recent months.
“Confidence in the outlook is clearly improving due to a number of factors, including lower interest rates and more affordable asking prices. Whilst 2008 was evidently a year of sharp price correction, 2009 is expected to see increasing evidence of a return to more normal market conditions,” he said.
In the chartered surveyors survey from March, 57% of local respondents said they saw transactions increase in the last three months, with the remainder saying they stayed the same.
For the same period 86% said that inquiries had increased.
Looking into the three months ahead, 71% of respondents to RICS said they expect transaction levels to increase further, with 29% expecting them to remain static.
With regard to prices however, 60% said that prices were down in the three months to the end of March, with rest reporting that they remained the same.
The UK-wide survey from RICS showed interest in property rising for the fifth month in a row and sales increasing for the first time in more than a year.
Around 31% more surveyors reported a rise in inquiries than those who saw a fall, the highest level since September 2003 and up from 21% more in February.
The jump in buyer inquiries is also beginning to translate into sales, with the number of transactions agreed rising for the first time since the end of 2007.
However, the improvement was slight, increasing to an average of 9.7 properties per estate agent during the three months to the end of March, up from 9.6 in February, and transactions remain very low by historical levels.
None the less, the balance of surveyors reporting newly agreed sales moved back into positive territory in March and the expectation is that sales will continue to improve going forward.