Belfast Telegraph

House prices show second 2% rise in a row, says new Northern Ireland housing market survey

by margaret canning

Evidence is growing of a "bottoming out" in the Northern Ireland housing market, according to the authors of a government report on house prices.

The residential property price index from Land and Property Services showed the second quarterly 2% rise in prices in a row.

Prices were also up 1% year-on-year, according to the official record, the first such increase since the final quarter of 2007.

June to September was the first time all types of property, including apartments, had risen – in the previous quarter, apartment prices had merely steadied.

The report's authors said their findings "add weight to the conclusion that the Northern Ireland property market has bottomed out".

The survey's standardised house price – a measure which includes auction and distressed sales – was £98,612. But in a measure of the extent of the crash, that was less than half of the peak value in the third quarter of 2007, and 9% lower than in the first quarter of 2005.

At 4,000, Northern Ireland had its highest number of quarterly sales since 2007 in the third quarter – but still one third of the volume at the peak of the market in the third quarter that year.

Ulster Bank economist Richard Ramsey said: "Transactions are rising but they are still rising at a relatively slow rate. I could expect to see them continue rising but it's going to be a slow recovery to getting back to 2007 transactions."

Mr Ramsey said the emerging stability should be regarded as an attractive attribute.

"We have seen the problems with having escalated house prices so we don't want that again.

"It's not in our economic interests to have house prices rising above current levels because where we are is more in line with the economy."

The state of house prices could be a selling point: "We should be selling the fact to inward investors, and hoping to use it to attract back others as part of our overall low cost of living."

He contrasted Northern Ireland's housing market with a lack of affordability in London, after a Financial Times report revealed that many graduates could not afford to rent, never mind buy, homes in the capital.

Richard McCulloch of Stanley Best estate agents in Magherafelt, Co Londonderry, said the firm was busier but he did not believe prices were going up. "I don't see prices rising because we would have to see properties coming on at a higher price and selling at a higher price."

The activity in his area was mainly from first-time buyers and investors, he said. "Even the middle market is still quite slow, and the upper part is almost non-existent in this part of the country. Where you have a bit more wealth in Belfast, it will be different."

Paddy Turley of Ulster Property Sales said more houses were selling and buyer demand was strong in its south Belfast patch.

Conor Mulligan, managing director of housebuilder Lagan Homes, said bookings were up 50% on this time last year, with forward sales of nearly 70 houses.

Belfast Telegraph

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