House prices fall by 11.4% as Ulster feels the slowdown
Published 04/10/2007 | 08:12
House prices in Northern Ireland are down by 11.4% compared with the second quarter of the year, it was revealed today.
Despite the latest findings from the Nationwide's House Price Survey, the province is still enjoying the highest house price growth in the UK at 42.6% for the critical third quarter of the year (July-September).
House prices here have tumbled down from a whopping 54% in the second quarter of this year to the current level, making the province the region with the greatest slowdown.
Despite this, property price growth has beaten even London with its 16.5% hike in values.
And Belfast is the number one hottest city in the UK with prices up 50%, taking the average cost of property here to £312,637.
Aberdeen is number two with an average property price in the Scottish city of £236,220, a rise of 35%.
The English cities of Sheffield, Bristol (both up 17%) and Reading (15%) follow respectively with average costs of £201,959, £246,469 and £256,458.
The continued phenomenal rate of house price growth puts the average cost of a house here at £227,970 with only London and the Outer Metropolitan areas more expensive.
And there is more mortgage misery for local first-time buyers who will have to deal with the fastest growing prices in the UK.
Those trying to get their foot on the first rung of the property ladder will have to pay over £200,000 and this is higher than anywhere else in the UK except for London.
Fionnuala Earley, Nationwide's chief economist, said: "Affordability is a major factor in Northern Ireland, particularly for first-time buyers."
And the province's property hotspots are the south east with prices up 49% taking average costs to £251,155; north east where the average home will have an asking price of £246,139 (up 54%) and finally the west which has the more modest growth of 38% and average price of £202,436.
Ms Earley described the province's spiralling house prices as "astonishing" and said the latest findings confirmed earlier Nationwide predictions that the market had peaked in the first quarter of the year.
She also claimed property prices are set to plummet again: "Over the past 12-months, prices in Northern Ireland have risen by 42.6%, 11.4 percentage points lower than the second quarter," said Ms Earley. "But even with this sharp cooling, the annual rate of growth still appears unsustainable, and we would expect to see significant further cooling during the rest of the year."
The economist said Northern Ireland is still outperforming any other part of the UK and there has been a " significant slow-down".
However Ms Earley attributed this downturn in part to the very strong market last year and predicted a " relatively comfortable" 15% growth for the next year.
The province's property prices are, however, bucking a national trend with the UK rate of growth slowing down to single digits at 9.3% in this quarter from 10.2%.
'Corinna is still quids in'
Corinna Turtle (28) bought a three-bedroom terrace house in east Belfast two years ago for £105,000.
Current value (estimate): £220,000
First-time buyer Corinna Turtle is not surprised to hear that propery prices here are plummeting.
" Because prices had gone up so quickly, I thought it was time for a massive correction," she says.
Corinna bought one of the last houses in the Lewis Square development in east Belfast two years ago, having quit a public relations job at a London law firm.
But it was only with financial support from her family and savings which allowed her to get onto the property ladder here.
Since then she has seen her investment increase in value rapidly. " Because houses in Northern Ireland came from such a low base, it doesn't really concern me."
She adds, however: "Home-owners are having a rough ride at the moment, especially with interest rates the way they are. I take a long term view on property. I have no regrets at all."
And she has no immediate plans to sell. "It is a 'wait and see' approach. Maybe next year?"
'Russell finally beats gazumpers'
Russell Lever (27) bought a two-bedroom terrace house in Newtownabbey one year ago for £106,000
Current value (estimate): £170,000
Gazumping is nothing new to Russell Lever as he spent 10 months house-hunting before getting the keys to his first home.
He lost out on no fewer than nine properties during his search for a property in north Belfast.
Eventually he went 'Sale Agreed' on his current home in Doagh Road, Newtownabbey, with the help of the Northern Ireland Co-Ownership Scheme.
Despite this, Russell is philosophical about house prices. "To be honest, I don't worry about it. The house prices had gone up so far I expected it to slow down. The market couldn't have continued the way it was going."
Russell says there have been such gains in the housing market over the last 18-months. "I think I would still make money from this house if I were to sell it now."
Although he has no plans to do so, concentrating instead on buying out the remaining share of the property from Co-Ownership.
And despite falling prices, he is glad he bought when he did. "I'm just grateful to be on the property ladder. I would've liked to be in north Belfast nearer my family and friends, but prices had just gone so far with investors coming in and gazumping everyone when I was looking."
'Whitehead ends Ciara's frustration'
Ciara Walls, 22, bought a three-bedroom terrace house in Whitehead in July for £165,000.
Current value (estimate): £170,000
Bidding wars dominated Ciara Walls and her partner Damian's search for a family home earlier this year.
The couple wanted a home for themselves and their 18-month-old daughter, Mia - but they were outbid on several properties in Belfast before they got their current home.
" We decided to look further afield to places like Downpatrick, Larne and Newtownards," said Ciara, who is originally from the north of the city. But it was a visit to the coastal town of Whitehead which brought an end to their frustrating search.
"We came and just loved it," says Ciara. "We knew it was the place we wanted to be."
The couple realise their home hasn't increased by the record-breaking amounts seen across Northern Ireland earlier this year: "It wouldn't be worth much more than we paid for it. It doesn't concern me," added Ciara.