Renewed confidence as house prices stabilise
House prices in Northern Ireland may finally be stabilising, reinforcing earlier hopes that the economic downturn could be drawing to a close.
The sprig of hope in the housing market emerged today in the monthly survey by the Royal Institution of Chartered Surveyors (RICS), bolstering figures from Monday which painted an improving picture for construction and manufacturing.
The Ulster Bank's purchase managers' index for June showed new business in these areas had increased with companies welcoming clients' burgeoning confidence.
And Northern Ireland's builders were enjoying growing workloads for the second time in six years – both times in the past year – according to the Federation of Master Builders yesterday.
Its state of trade survey showed Northern Ireland's builders were faring better, amid the continuing economic difficulties, than the rest of the UK.
Today's figures from RICS for Northern Ireland reveal the first positive moves upwards in the housing market since 2007.
Prices vary widely across the province, however. Yesterday a three bedroom house in Castledawson, Co Derry, was on the market for £34,950, while a similar property in Bangor, Co Down had an asking price of £142,000.
Overall, prices have slumped from around £208,000 in 2007 to around £94,000 this year – according to the standardised house price statistic in the government's residential property price index.
According to today's RICS report, June was only the second time since July 2007 that the price balance – which gives an indication of whether average house prices are rising or falling – has found its way into positive territory.
An average of 21% of respondents reported that prices were up in the three months to the end of June.
Some 28% said prices were up in the period, with 65% reported figures had not changed. Only 7% of estate agents said prices were down. RICS spokesman Tom McClelland said: "What we are seeing is an overall trend of stabilisation in the market, which we expect to continue over the year as a whole."
David Little, regional director of the National House Building Council, claimed there was a "renewed wave of confidence" in house building.
"Much of Northern Ireland's house building industry is made up of a number of high-quality, small to medium-sized builders and and we are starting to see many come back into the market."
He noted, however, that many of them were still finding it difficult to secure finance from lenders. On the new build market, he said: "New house prices are as cheap as they are going to go and people have been waiting and watching and we have seen some fantastic value out there."
Estate agent Desmond Turley, from Ulster Property Sales on Belfast's Lisburn Road, agreed new builds were being "realistically priced".
"If you can get the price structure right then there will be movement and I believe the right structure is there."
He said he had seen signs from buyers that lenders were "becoming more reasonable" especially for those on the first rung of the property ladder.
"If you can kickstart the first-time buyer market then it will get the whole market under way," he said.
It's understood that pre-sales at the Millmount development in Dundonald – which has been taken over by the Republic's 'bad bank' Nama – have exceeded £1m, another demonstration of the increasing buoyancy in the new build market.
It was announced in April that Nama was funding 95 new houses to the tune of £9m.