Viewpoint: Ups and downs of property market
Published 19/11/2007 | 08:24
As anyone who is involved in buying or selling a house at present will be aware, the shine has gone off the property market in Northern Ireland. Although it is more a correction than a collapse, prices have been falling, and quite dramatically in some cases.
This is welcome news for many first-time buyers who have until now been priced out of the market. For them, the challenge is working out when the low point has been reached.
The one certainty is that sooner or later, prices will start to rise. While the buy-to-let market looks inherently risky at present, owning one's own home, particularly in a good location, still represents a sound financial investment.
The pattern of rises of 50% in house prices over two successive years was unsustainable, but now the tide has turned and vendors are dropping their prices for a quick sale.
The uncertainty is having a knock-on effect on the estate agency sector, which has over-heated as well. Over the past two years, the number of practices in Northern Ireland has increased by more than 30%, meaning that some fall-out such as the recent redundancies at McAfee Properties in Ballymoney was inevitable.
True to character, though, the property sector remains bullish, with some agents insisting there has never been a better time to buy a house.
Buyers, sellers and agents are pinning their hopes on next year's promised cut in interest rates, which could help revive the market. The Bank of England must be encouraged to reduce the rate at the earliest opportunity.
Pressure on householders will also be eased by the three-year rates freeze which Finance Minister Peter Robinson proposed as part of his draft Budget. In the present climate of rising costs for electricity and oil, anything which can ease the burden on householders is welcome.
Although there is uncertainty at present, the situation is far from being one of gloom and doom. The Belfast Telegraph Property Awards supplement, which is being distributed with today's newspaper, paints a picture of an industry which is realistic but not despondent.
Major developments are still taking place in both the residential and commercial sectors, and significant investment is still being attracted from Britain, the Republic and further afield.
One of the most popular awards at last week's ceremony was the naming of veteran estate agent Eric Cairns as property personality of the year. Mr Cairns, who describes himself as "a son of the shipyard" now presides over a successful property agency and was a worthy recipient.
House prices have fallen and the property market is cooling. But what goes down must eventually come up - even if it takes some time.