Northern Ireland needs 9,000 new homes every year to keep pace with the ‘massive demand’
Demand for private housing in Northern Ireland is continuing to outstrip supply, a leading real estate agent has said.
Simon Brien was speaking as new government figures for the first quarter of 2019 showed a 3.5% rise in the average price of a home in Northern Ireland since last year.
While the figures from Land and Property Services showed a 1% decrease between the end of 2018 and the start of this year, some areas significantly bucked the trend.
The Causeway Coast and Glen area, which is preparing to host The Open in Portrush this summer, saw a 2.3% rise over the quarter and a 10% surge over the year.
“The last quarter of 2018 was very strong, and even with the slight decrease in Q1, Northern Ireland is proving itself a strong and resilient market,” said Mr Brien.
“As has been the case for the past number of years, we know that demand is currently outstripping supply in the private resale market.
“In the face of the well documented Brexit uncertainty, we anticipate the housing market to remain steady as, in this market, there is a massive shortfall of new housing following the downturn of 2008 to 2013 when new house building virtually halted.”
Managing director of the Construction Employers Federation, John Armstrong agrees.
“Due to a variety of market factors, not least the lack of construction of new homes following the economic downturn, demand is currently outstripping supply – and this trend is forecast to continue.
“We estimate that to keep pace with demand around 9,000 new homes should be built year-on-year – and despite an upturn in construction since 2014, this figure is not being met, ultimately leading to increased demand as pressure is put on the supply chain.”
According to the new data, the average house price in Northern Ireland stood at £134,811 for the first quarter of 2019, well below the UK average of £226,798.
Lisburn and Castlereagh remains the most expensive place to buy a home, with the average sitting at £160,301 for the first quarter.
Armagh, Banbridge and Craigavon remains the cheapest, with an average of £119,951.
According to Simon Brien, average house prices in Northern Ireland remain about five times average salaries, that compares with England and Wales, where the difference is eight-fold.
“The affordable level of house prices and potential return on investment is proving attractive to investors – and whilst the market is still dominated by local private buyers – we are seeing more and more interest from buyers outside the market, who are attracted by the value and the average growth of 4% to 5% year on year,” he said.
“There is also an increased interest from Ireland and the rest of the UK, whilst buyers from Northern Ireland who have lived much of their professional lives elsewhere are choosing to relocate back with young families for the schooling, community and quality of life that Northern Ireland offers.”