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Housing market on the up but recovery will be slow

Northern Ireland’s housing market is on a long and winding road to recovery, a new housing market survey claims.

The latest monthly survey by the Royal Institution of Chartered Surveyors (RICS), sponsored by the Ulster Bank, said housing market transactions were rising but only at slow rates.

And the survey suggests growth will continue at a snail’s pace, thanks to overall sluggish economic growth and the challenge posed by looming public sector cuts.

Tom McClelland, RICS spokesman in Northern Ireland, said: “The housing market, like the economy, is in recovery mode. However, like the economy, recovery in the housing market is going to be slow.

“Housing transaction levels, which are the most important factor in the housing market recovery, are rising — but at a marginal rate, and they are still a long way off what you could call normal levels.

“In terms of prices, there continues to be some movement, but we anticipate that average house prices will be broadly flat over the course of the next couple of years.

“However, there will be variations and there are risks,” he added.

Derek Wilson, head of lending products at Ulster Bank, said: “It is true to say that anyone hoping for strong price growth in the near future will likely be disappointed, but it will be encouraging for those seeking to purchase a home that the market is moving increasingly away from what were abnormal market conditions and into a period of greater stability.”

A net balance of 30% of Northern Ireland chartered surveyors responding to the RICS housing market survey reported rising transaction levels in the February survey.

A net balance of 70% said that they expect transaction levels to rise further over the next three months.

The majority of respondents — 60% — reported prices had been unchanged over the past three months, with 5% saying that they were up and 36% saying that they |were down.

The findings of the RICS survey of the Northern Ireland housing market broadly reflect the uncertain mood of the housing market UK-wide.

Nationwide and Halifax reported rises in average prices in January of 1.2% and 0.6% respectively.

But last week the Halifax reported a February fall in average price of 1.5%, the first fall in eight months, thanks to |bad weather and the end of the stamp duty holiday.

Its findings echoed a report by Nationwide of a 1% fall in prices in February.