Belfast Telegraph

Wednesday 23 July 2014

Mark Carney's verdict on Northern Ireland housing market under fire

Governor of the Bank of England Mark Carney

Stormont Finance Minister Simon Hamilton has said it is "harsh" and "unfair" for the Governor of the Bank of England to claim that Northern Ireland house prices are not recovering.

He was speaking after Mark Carney said Northern Ireland is the only region of the UK where house prices are not picking up.

Mr Hamilton said Mr Carney's comments were at odds with analysis carried out by the Executive's Department of Finance and Personnel (DFP).

"When you look at actual transactions, in the last couple of quarters we've seen significant rises, both in house prices and sales," he said.

"Therefore, I was a little shocked by Mr Carney's remark that there was no recovery in the property market in Northern Ireland.

"It is modest, but there is a recovery, nonetheless, and it is sustained – and experts in the sector are optimistic that things are getting better.

"To say there is no recovery is a little harsh and a little unfair, especially when you look at the wealth of evidence that shows things are slowly but surely moving in the right direction."

During a BBC interview yesterday Mr Carney said that "if you look at the UK as a whole, everywhere bar Northern Ireland – we are now seeing house prices begin to recover, so it is a more generalised phenomenon".

However, the most recent official house price statistics for Northern Ireland suggest a modest recovery has begun.

The Northern Ireland Residential Property Price Index, which is produced by Stormont's statistics agency, revealed quarter-on-quarter and year-on-year rises in the third quarter of 2013.

Prices were up 2% quarter-on-quarter, the second consecutive quarterly rise and, while acknowledging it is a small hike, Mr Hamilton said it does represent recovery. Prices were also up by 1% over the year to the end of September 2013, although they remain less than half of the peak value in 2007 and still 9% lower than the start of 2005.

The NI Residential Property Price Index for the last quarter of 2013 is due to be published soon.

Ulster Bank chief economist Richard Ramsey said that while there are challenges ahead, Northern Ireland is faring well in some specific areas.

He said: "We're really lagging behind compared to other parts of the UK but other parts of the UK did not see the 55% peak to trough fall in house prices that Northern Ireland had seen.

"But in many ways, when we look at the housing market in Northern Ireland, there are aspects of it that are actually more favourable than the rest of the UK, in particular we're looking at affordability."

Prof Neil Gibson, from the Northern Ireland Centre for Economic Policy at the University of Ulster, said he expects Northern Ireland's housing market recovery to accelerate in coming months.

"We've seen the transaction levels improving and we've begun to see small increases in prices in certain markets – the greater Belfast area – much stronger than elsewhere," Prof Gibson said.

"We can expect to see that continue during the year and we also have more banks lending and actively seeking new customers, so we should look for quite a positive year in the labour and in the housing market in 2014."

BACKGROUND

Mark Carney said the UK housing market is recovering everywhere but Northern Ireland, leading Stormont Finance Minister Simon Hamilton to caution against "unnecessary panic". The Office for National Statistics index showed year-on-year rises for October and November 2013. December figures to be released this week may show that house prices in Northern Ireland rose over a calendar year for the first time since 2007.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Latest News

Latest Sport

Latest Showbiz