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House sales in Northern Ireland suffer dramatic fall - survey
13th May 2008
The volume of house sales in Northern Ireland suffered a dramatic decline in the first quarter of this year, according to the latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive
The volume of house sales in Northern Ireland suffered a dramatic decline in the first quarter of this year, according to the latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive
The survey – the broadest based and most authoritative of all those undertaken in Northern Ireland – showed the lowest number of quarterly house sales since it began in 1984.
Between January and March the University recorded 896 transactions from almost 120 estate agencies, compared with 2,120 in the same period the previous year, a drop of almost 60%.
Commenting on house prices, the survey’s authors – Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown of the University of Ulster - said that while there was an inevitable market correction, price levels had not collapsed.
The average price of a house in Northern Ireland, at £230,908, was still 7.5% higher than a year previously but prices in the first quarter fell by 4.6% compared with the last quarter of 2007 demonstrating the continuing correction in the housing market.
The authors said: “However, the short term quarter figures suggest a weak market during the first three months of 2008 which, if it continues into the second and third quarters of the year, may well see annual rates of change move into negative figures.
“Potentially of greater concern is the small volume of sales activity. The trend of reduced sales has been evident since mid 2007 but in the first quarter of this year it reached a new low, falling to the smallest ever volume of transactions since the start of the survey in 1984.”
The survey report said this was impacting on both existing and new build markets. Many estate agents had indicated few or no sales during the three months. This, it said, was consistent with other indicators of the housing market, notably the sharp decline in the number of new mortgages.
According to the University’s research, price falls largely applied to properties worth less than £250,000. Higher priced properties faired better and appeared to be less exposed to the current market downturn.
The economist Alan Bridle, Head of Research at Bank of Ireland Northern Ireland, said:"With two consecutive quarters of negative growth, the local housing market is technically in recession for the first time since the early 1990s. The overwhelming theme of this survey is the lack of sales and the repercussions for the house building industry but, on an overall basis, the decline in average prices in the quarter has been relatively modest, contrary to some speculation.
“Price trends are not uniform across the region or property types, with significant discounting in some areas partially offset by increases and stickiness in others. As an observation we may have something of a stalemate, with vendors looking to sell at 2007 prices and potential buyers deferring purchase in anticipation of lower prices and easier access to credit later in 2008 or 2009. It is not certain how this will play out over the coming quarters but the risks to prices remain on the downside.”
The Housing Executive’s Head of Research, Joe Frey, commented: “Although the fall in house prices at the lower end of the market will be welcomed by first-time buyers, it does not necessarily mean homes are becoming more affordable, with some banks and building societies - understandably in the current financial climate - taking a much more risk-averse approach to lending. It is important therefore not to take our eye off the ball, in terms of putting the policies and practices in place which will facilitate the delivery of affordable homes in the longer term.”
Property Types
Short term performance – the first quarter of this year compared with the final quarter of last year – showed falls in house prices in all sectors with the exception of detached houses which showed an increase in the average sale price of 4.4%. The average price for terraced/townhouses was down 8.8%, semi-detached houses by 6.5%, semi-detached bungalows by 12.3% , detached bungalows by 7.3% and apartments by 2.5%.
Annual performance – comparing the current average prices with the same time last year – meant that some property types continued to show an increase. Average prices for apartments at £213,327 were 16.2% higher over the year, boosted by a number of high-profile schemes in Belfast.
The detached house market was also showing annual increases. The average for detached bungalows at £310,787 was 15.3% higher and detached houses at £354,527 were 9.8% higher than a year previously. In contrast, the average price of terraced/townhouses at £170,912 was down by 3.6% over the year; semi-detached houses at £210,908 down by 1.2%; and semi-detached bungalows at £185,672 were down 6.9%.
Location
Regional analysis showed a sharply variable picture, with average prices up in some areas and down over the year in others.
Belfast performed significantly better than the rest of Northern Ireland. The average price of a house was £254,011 which was 22.4% higher than a year previously but on a quarterly basis the average price for all property types fell, with the exception of detached houses. South Belfast is still the highest priced location, followed by the east, north and west of the city.
North Down’s average of £250,678 was up 10.7% over the year and 3.1% over the quarter, the latter boosted by the apartment sector.
The average of £257,190 in Lisburn was down by 0.7% over the year and by 9.8% on the previous quarter.
In East Antrim the average of £211,662 was 12.6% higher than a year previously but down 2.4% on the last quarter of 2007.
The average in the Antrim/Ballymena area was £188,147, a fall of 9.9% over the year and down by 10% on the previous quarter.
In Coleraine/Limavady/North Coast, the average price of £264,055 represented a small annual increase of 3.1% but it was down 5.7% on the previous quarter.
In Derry/Strabane, the average of £218,979 was still 21.1% higher than a year before and showed a 4.6% rise over the quarter but the volume of house sales continued to be very low.
Mid-Ulster had an average of £200,942 which was down by 7.9% over the quarter and by 17.7% over the year – a response to the unsustainably high rates of growth seen early in 2007.
In Enniskillen/Fermanagh/South Tyrone the average of £228,917 was up 7.2% over a year and by 8.6% over the quarter but the sample was small reflecting the continuing low levels of transactions.
The average in Craigavon/Armagh of £172,644 showed a sharp correction falling by 24.2% over the quarter and by 22.4% annually.
In Mid and South Down, the average price of £259,570 was 18.2% higher than a year previously and was up by 1.3% on the quarter mainly because detached properties continued to perform strongly.
© Bank of Ireland 2008
