A year since the closure of the housing market during the first lockdown of 2020, the market has fully regained the momentum which it had been starting to show in late 2019.
eopening of the market in June last year prompted unprecedented levels of demand, buyer enquiries and bidding, on a par with the housing bubble of 2007. In fact, quarter-on-quarter house price growth is now the highest since the previous boom period 14 years ago.
Pent-up demand and the limits put on us by lockdowns have led to this surge in market activity.
Being forced to spend most of our time at home has led households to adjust their living arrangements and seek more space, inside and outside the home.
During last year's turmoil, our homes became a more important sanctuary to us than ever.
Government interventions have also contributed, including the furlough scheme and lower interest rates, which have created a benign lending environment, as well as the stamp duty holiday.
Lockdowns enabled many of us to save money, now being put towards deposits on new homes, after our usual channels for spending on socialising and holidays had been cut off.
This cocktail of intervention measures and economic signals has served to sustain and fuel house price growth throughout the post-lockdown periods.
Indeed, the housing market continues to be characterised by trading-up to a bigger home and relocation - particularly from urban to rural areas.
Working from home patterns have broadened our options for housing and altered our needs.
In contrast, the previous housing market boom of the years up to 2007 had been driven by asset price inflation within real estate.
Whilst the housing market continues to show no obvious signs of waning, as we transition out of lockdown and into immunity while vaccinations take effect, there will be further structural change.
We can expect changes in market demand and buyer and seller behaviour, but whether these feed into a softening of house prices remains unknown.
However, any changes in market fundamentals once government support measures end may not necessarily translate into house price volatility.
Housing supply pressures remain a challenge and will continue to do so in the immediate future, and this will likely act as a cushion to any slowing down within the housing market and any potential price erosion.
Colin Graham, director of Colin Graham Residential, a leading residential agency in Co Antrim, said: "It goes without saying that it has been a very strange year for us. Prior to Covid-19 hitting, the market had finally started to gather momentum, making up much-needed lost ground after the financial crisis of 2008.
"We had no idea what we were facing on our return last June, but were pleasantly surprised when, if anything, the market was stronger.
"In our opinion, that was driven by the fact that people had had the opportunity to save, had a new-found appreciation for their home and garden space, the stamp duty holiday and the fact that the cost of borrowing was at an unprecedented low level.
"We anticipate that the remainder of the calendar year will be strong, with an inevitable slowing next year, likely returning to 3-5% growth per annum for the foreseeable future.
"Our lack of growth from 2008 to 2015, our high proportion of public sector employment and the fact that our banks are in a much better financial standing than what they were in 2008, should all give us confidence that another property crash is not around the corner."
Dr Michael McCord is Reader in Real Estate at the Belfast School of Architecture and the Built Environment
PRICE WATCH: THE HOUSING MARKET OUTSIDE BELFAST
House price statistics from Ulster University for early 2021, presented today on a county by county basis for the first time, show some notable increases compared to early 2020.
Co Down is the star of the league table and had the highest levels of price inflation over the year, with prices up 16.7%.
In Co Antrim, prices rose significantly, at 9.1%, while in the North West, Co Londonderry had an overall increase of 5.7% year-on-year.
However, more modest price growth has been seen across Fermanagh (2.4%) and Tyrone (1.2%) with the Orchard County of Armagh showing the lowest growth (0.8%) over the year.
If we look at the trends behind the statistics, we see a lot of changes which have taken place over the last year, often linked with the housing stock and demand within each county.
When considering house price levels based on a rural/urban basis, with the notable exception of Co Antrim, all counties show increased house price change within rural areas. However, growth in Co Antrim was higher in urban areas.
House price growth by property type also reveals some degree of regional variation across the counties.
By and large most price inflation has been within the mid-to-high levels of the housing market and mainly for semi-detached and detached houses.
The Belfast housing market
Across the Belfast housing market, the average house price currently sits at £186,841. The terrace/townhouse sector has an average of £124,250, showing a 5.9% increase from Q1 2020 levels.
Semi-detached properties reveal an average price of £192,363 and had the highest percentage growth (9.3%).
The average value of detached houses was considerably higher at £313,646 – but with a more modest price increase (2.7%) on this time last year. The apartment sector is the only segment of the market to have a price drop (6.1%) citywide, with an average price of £142,064.
But it should be pointed out that this does not entirely reflect the nature of the price performance. However, it does reflect the changes in the nature and volume of apartments being sold.
Within the city, west and east Belfast show relatively similar and modest levels of price increases over the past year of around 4% and 5.3%,
But north and south Belfast have had double digit price growth of 13.7% and 13.2% respectively.
When considering price change across property types, market demand and supply tastes are apparent, with demand for particular property types driving price growth.
Within west Belfast, detached homes have witnessed the highest increase in prices (5.6%), and in north Belfast the largest increase has been in the terrace/townhouse sector (18.48%) showing average prices increasing from £89,912 to £106,531.
Both south and east Belfast have observed the largest price growth in the semi-detached and terrace/townhouse sectors where trading-up activity appears to have dominated over the past year.
How we worked out your house prices
Our How Much is Your House Worth? supplement compares Q1 2020 and Q1 2021 house prices, measuring annual percentage change on a rolling quarterly basis.
The analysis is based on 8,043 sales (3,704 in Q1 2020 and 4,339 in Q1 2021), using sales evidence from Propertynews.com and the Ulster University House Price Index, produced in partnership with the Progressive Building Society and the Northern Ireland Housing Executive.
