Increase in first-time buyers gives housing market a boost
Northern Ireland's housing market is showing early signs of recovery thanks to an influx of first-time buyers, new research has shown.
The University of Ulster's latest Quarterly House Price Index has found that the number of sales has been sustained for a second consecutive quarter – suggesting a tentative improvement in the market.
The overall average price of a house in the second quarter – April, May and June – was £130,864, virtually unchanged from the previous quarter (£131,128).
Will Miscampbell from Fetherston Clements Estate Agents said he was seeing a much more positive sentiment in the market.
"The growth in the market in Northern Ireland will be heartening for vendors and those who have been keen to buy property, but nervous about doing so," he said.
"What we are seeing on the ground would point to the fact that the market has turned and we should begin to see more widespread positive movement in pricing soon."
There were wide variations in performance between different property types over the last year.
Topping the list were detached bungalows – up 16.2% over the year to an average of £148,342 –while terraced houses and townhouses increased by 6.5% to £86,216.
By contrast, semi-detached bungalows fell 25.3% over the year to an average of £103,394, detached houses declined by 13.9% to an average of £199,553, semi-detached houses saw a drop of 10.6% to £120,377 while the apartment sector fell 9.9% to £97,765.
The survey covered 1,409 open market transactions from a network of estate agents, a sample size which is highly comparable to that of the first quarter – suggesting a degree of momentum in the market.
But the report – written by Prof Alastair Adair, Dr John McCord, Prof Stanley McGreal and Dr David McIlhatton – cautioned that performance across Northern Ireland remained vulnerable to negative events and news.
Although the overall average price is virtually unchanged over the quarter, the stabilisation of price levels has, according to estate agents, led to an increase in first-time buyer activity.
With a significant percentage of properties within the lower price bands, the report notes the affordable price structure of housing in Northern Ireland.
Nearly three quarters of the total sample (74%) sold at or below £150,000 while 41% of properties sold at or below £100,000.
The authors said the lower price bands are important in providing potential first-time buyers with a range of affordable housing.
Alan Bridle, economist at Bank of Ireland UK, said that, six years on from the peak of the price boom, there is encouragement in this survey with the pick-up in sales and stable prices.
He added: "The more positive trends from the mortgage and labour markets of late should be supportive of steady, if unspectacular progress for the rest of 2013 and into 2014, notwithstanding continued variable performance in local markets."
Despite the more positive outlook, PwC believes house prices aren't going to recover fully for some time.
In its Northern Ireland Economic Outlook, economist Dr Esmond Birnie said it could take until 2025 before the market recovers the ground lost in the past six years.
"Average property prices have some way to go before they are clearly on the turn. Real recovery in the property market will be long, difficult and wholly dependent on factors ranging from reduced household debt to more liberal lending policies," he said.