Housing market concern amid cuts
Public service spending cuts could add to the challenges facing the housing market in Northern Ireland, it has been claimed.
With prices falling every month for the last three years, chartered surveyors hinted at worse to come after the Government introduces drastic cost-saving measures later this year.
There have been no price increases reported since August 2007, according to a new survey.
Tom McClelland, of the Royal Institution of Chartered Surveyors, said the scale of the housing bubble has led to a big price correction.
Prices had risen significantly between 1995 and 2004, and, at that stage, economic fundamentals suggested price growth should have moderated. But, instead, for a number of reasons, the opposite happened, creating a large price bubble between 2004 and 2007 that has been correcting.
He said: "There is certainly much more stability in the market now than there was when the house price correction was at its most intense.
"There is also, clearly, significant variation in the marketplace currently in terms of different areas and property types. There is also evidence of a return of investors, despite the squeeze on housing benefit impacting on the private rented sector. However, unsurprisingly, the process of correction continues in areas where price growth was most out of kilter with fundamentals."
But he also warned of the challenges facing the housing market once the scale of the public spending cuts, which will hit the local economy, become known.
He said: "Prices have corrected significantly to date, and can only fall so far, but with people in our public sector-dependent economy fearing for job security, there remain clear risks. That said, we expect the mid-term trend to be largely flat prices. The recovery will be a long-term one."
Derek Wilson, head of lending products at Ulster Bank, added: "We have been working hard to help aspiring homebuyers and home-movers, but the market is challenging. Many buyers are understandably circumspect about purchase decisions, and should continue to make judgments based on their own circumstances."