Plummeting Northern Ireland property prices tumble by 53% in five years
The dramatic fall in house prices in Northern Ireland is continuing with west of the Bann hardest hit, according to a government index.
Land and Property Services — part of the Department for Finance and Personnel — said residential property prices fell by 11% in the year to June 2012.
Between April and June they came down by 3%, leaving the province with the average house price of £95,623, according to the residential property price index.
The index uses stamp duty records to record house prices and includes repossessions and auction sales.
A spokesman said house prices had peaked in the third quarter of 2007 and had fallen by 53% since.
“Since the third quarter of 2007 [the index] has fallen initially sharply, albeit with prices stabilising in 2009 and the first half of 2010.
“Since 2010, prices have continued to fall but at a less marked rate of decline.”
Economist John Simpson said it would be “excitable” to suggest that Northern Ireland had experienced the world’s worst property crash.
“Northern Ireland had the most embarrassing hyper-inflation in house prices in 2005-2006, worse than anywhere else in these islands.
“We are now living with the consequences of that, and many people are having to get used to the idea of being in negative equity over the next 20 years.”
Professor Alistair Adair said: “It’s one of the biggest crashes in these islands but Spain has also experienced a massive decline.”
Average prices are now 7% lower than the first quarter of 2005 — but more transactions are taking place.
There were 2,962 sales in the second quarter of 2012 — up 11% than the same period last year.
Ulster Bank chief economist Richard Ramsey said: “By region, the steepest decline was within the west and south of Northern Ireland.
“This region saw [the index] post a quarterly fall of 10% in the second quarter of 2012 and is 17% lower over the year.
“Since its property price peak, prices have fallen by 55%.”
The average house price in the south and west of Northern Ireland is now £84,893.
Estate agent Richard McCulloch of Stanley Best Estate Agents in Magherafelt, Co Londonderry, said the south and west were experiencing big drops.
“West of the Bann has traditionally achieved lower asking prices, which reflects the realities of moving further away from Belfast where all the public sector jobs are,” he said.
But sales were happening in the lower end of the market, he said. And with prices lower, people were not committing to big mortgages. “Gone are the days that first-time buyers set out with a noose around their neck in the form of a high mortgage.”