Northern Ireland housing market may take three years to recover
The Northern Ireland housing market could take up to three years to recover from its current slump, experts have predicted.
Local estate agents said the latest figures from the Nationwide House Price report, which revealed that prices here have fallen by 5.2% over the year, are the result of a “one of the most tumultuous periods” in housing market history.
They also called on the government at Stormont to act immediately to attract inward investment in a bid to save jobs in the wake of public sector cuts.
The beleaguered housing market suffered another blow yesterday when the report revealed the province is the only part of the UK to see prices plummet.
Mr Keith Mitchell, senior partner at Templeton Robinson, said: “Depending on who you are, 2006-2008 was either a dream or a nightmare. We anticipate it could take two to three years for the entire market to settle so we get a consistent picture.”
He added, however, that he was not surprised by the trend: “Overall the market is continuing to realign after one of the most tumultuous periods in living memory where prices rocketed 50% in two years. It is only natural that, given Northern Ireland’s unique experience, we will take longer than other UK regions to get back to normality.”
Mr Mitchell claimed: “While there are areas in Northern Ireland which are continuing to see price reductions, there are others where prices have stabilised or, indeed, risen a little.”
He also claimed property sales are on the up with more stable prices: “We are now seeing a slow and steady return to a normal market where people move for lifestyle reasons and not for short-term financial returns.”
Meanwhile, Desmond Turley of Ulster Property Sales said the Nationwide study has provided a stark reminder that Northern Ireland is on a very different footing from the rest of the UK when it comes to the housing market.
Mr Turley said of the recent findings: “The market significantly under-performing compared to all other regions reflects how acutely we may feel the effects of the emergency budget when public sector cuts kick in later this year.”
He also called on the Stormont government to act “immediately” to attract private sector investment for the good of the local economy.
“In the meantime the market still offers opportunity, particularly for those wishing to move up, and especially the first time buyer who has the advantage of significantly reduced prices, low interest rates and a more attractive house price to earnings ratio,” Mr Turley added.
Another agent, Will Miscampbell, associate director at BTWCairns, said: “The fall in house prices represents a reaction from vendors to market conditions and this realistic approach has helped stimulate sales and increase the number of transactions completed.”
He said BTWCairns have agreed over 420 properties in the first five months of 2010 and are continuing to see an increase in the level of sales.
He added: “Our perception of the property market here in Northern Ireland is very positive and we would envisage a continued increase in the level of transactions experienced.”
Analysis: A climate shaped by the credit crunch
By Helen Carson
Northern Ireland’s housing market is still attempting to recover from the boom and bust years.
The last thing home-owners want to hear is that prices are down again. Nonetheless, that is the reality based on the most recent figures from Nationwide for the second quarter of 2010.
And the fact that the property market in every other part of the UK have prices slowly nudging up, again by the smallest of margins, is not good.
The heady days of the 2006/07 boom seem light years away now, but it was only three years ago the Nationwide economist Fionnuala Earley was talking about the province’s “astonishing” house price growth. Of course then the average price here was a staggering £225,447, with a phenomenal 54% growth.
However, Ms Earley did make some other points in her analysis of the time, referring to the “speed” of prices here as we leap-frogged from having the cheapest housing in the UK to the most expensive.
She said at the time of one of those jaw-dropping reports: “Recent growth rates appear unsustainable.” Some would argue that was obvious, yet still three years on with prices plummeting there are many houses that have a for sale sign plonked outside their front door like a permanent fixture.
But today is a very different economic climate which has been shaped by the credit crunch followed by a global recession and a new government. People’s lives are also blighted by fears over jobs.
In Northern Ireland the historic ceasefires changed the landscape here and one of those consequences was the demand for housing.
It seems the road to recovery may take longer than it ever did to go up.