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Northern Ireland house sales 'down 50% this year'

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Wednesday Aug 6 2008

House sales in the Northern Ireland have plunged by 50pc, according to a new survey by the University of Ulster and Bank of Ireland, which showed a market in confusion amid widely differing prices.

Just 1,044 homes were sold in the second quarter of the year as the credit crunch continued to hit home.

Prices showed wild variations, with semi-detached properties recording annual falls in value of close on 20pc -- but apartments showing price rises of more than 20pc, which masked the general decline in prices.

Overall, a fall in property prices of 4pc was recorded over the quarter.

The report warned that average prices, which peaked at almost £250,000 this time last year, will fall to close on £200,000 by the end of the year, having dropped to £226,934 in the second quarter.

The survey report said this fall of 4% showed a “dramatic change of sentiment” from a year previously when house prices were going up on average at 51% when the market was at its peak.

Report authors Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown of the University of Ulster, said: “This survey highlights that some sectors of the housing market are experiencing appreciable rates of price decline though the overall picture when balanced out suggests that there has only been a 4% reduction.

"But the main impact on the market is in the volume of transactions which have been more than halved over the year.”

The report said: “While a correction in the market is taking place, it is important to stress that price levels have not collapsed and the marking down of prices appears to be incremental rather than a one-off correction.”

The economist Alan Bridle, from the Bank of Ireland Northern Ireland, said: “The survey shows that price changes vary widely across different parts of Northern Ireland and across the types of properties, so people should be cautious about making over-simplistic judgments.

"For instance, there are different factors affecting both the resale and the new-build markets.

"There is no precedent in this region for what is happening in terms of a genuine housing cycle, so we are on a journey through the unknown - which itself is feeding the uncertainty. However, with a very quiet resale market, I believe there is a high probability of the average price dropping closer to the £200,000 level before the end of year, with a period of adjustment stretching into 2009.

"Anyone looking for the green shoots of recovery should keep an eye on transaction levels which are likely turn before prices do - but it might be a while."

Regional breakdown

Regional analysis showed that price reductions were happening in almost all areas of Northern Ireland. However, in Belfast - with its busy apartment market - the average house price of £247,648 was still up 3.3% compared to the second quarter of 2007. While detached houses as well as apartments were up, there were sharp falls in other categories.

North Down: average of £251.526 was down by a relatively modest 2.3% over a year.

Lisburn: The average price of £230,243 in Lisburn showed a significant drop of 17.3%.

East Antrim: the overall average of £190,133 represented a 7.8% fall over a year.

Antrim/Ballymena: the average in the Antrim/Ballymena area was £209,820, a drop of 8.1% over the year.

Coleraine/Limavady/North Coast: the average price fell significantly, down 26.5% to £203,728.

Derry/Strabane: the volume of sales was well down but the average price showed an increase of 16.7% to £221,227, influenced by a good performance by detached homes.

Mid-Ulster: had an average of £201,746, representing an annual decrease of 16.8%.

Enniskillen/Fermanagh/South Tyrone: the average of £193,406 was a decline of 20.8% over the year.

Craigavon/Armagh: average of £185,016 was also sharply down by 20.1% over the year.

Mid and South Down: the average price of £236,480 was just 2.4% lower than a year previously, partially influenced by a strong rise in apartment prices.

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