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Northern Ireland house prices continue to fall but expected to flatten out by end of 2009 - Survey
15th May 2009
The fall in Northern Ireland’s house prices continued in the first quarter of this year, showing a year-on-year drop of 35%, 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 fall in Northern Ireland’s house prices continued in the first quarter of this year, showing a year-on-year drop of 35%, 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 average cost of a house declined by 10.8% during the first quarter, a lower rate of decline than the 16.6% experienced in the final quarter of 2008.
The volume of housing transactions in January, February and March remained low, with 692 deals recorded. This is in line with the levels experienced in the previous two quarters although the authors pointed out that the winter months always tend to show fewer transactions.
According to the report, anecdotal evidence from several estate agents suggests that inquiries have picked up during the first quarter and this is likely to translate into rising sales volumes.
The survey is the most broadly-based and authoritative of all those undertaken in Northern Ireland. It covers about 120 estate agents and records all open-market transactions, not just those involving mortgage lenders.
The authors of the report, Prof Alastair Adair, Prof Stanley McGreal and Mrs Louise Brown, said they anticipated that the high level of volatility in the housing market would decline rapidly over the course of 2009 as price levels start to consolidate.
They said: “The downward correction in the market, as illustrated by the overall University of Ulster House Price Index, is likely to be as dramatic as the steep increase in 2006 and the start of 2007. We expect the trend in the price index will flatten out by the end of the year.”
The economist Alan Bridle, Head of Research at Bank of Ireland Northern Ireland, said: "Prices have fallen by almost 40% from their peak. At an average of around £157,000, we are now back at the pre-boom levels that prevailed in the early part of 2006.
"It is unlikely we have yet reached the absolute trough in the price cycle, with the notable exception of the new build segment, but the survey shows the restoration of affordable housing in Northern Ireland is well advanced."
The Housing Executive’s Head of Research, Joe Frey, commented: “Our latest affordability index confirms the significant improvement in the ratio of incomes to house prices. However, difficulties in obtaining mortgage finance continue and, more importantly, rising unemployment and growing economic uncertainty would indicate that first-time buyers will continue to face challenging times. It is important that a well-managed private rented sector and a sufficient number of new social dwellings are provided to help younger households, in particular, through this difficult transitional period.”
The shift towards greater affordability saw 19% of properties in the latest survey selling below £100,000 and collectively the majority of houses in the survey (55%) selling at less than £150,000.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, now stands at 568.08 representing another in a series of sharp declines relative to its peak. The graph of the house price index increasingly highlights the spike which occurred in mid 2007. However, viewed over ten to 15 years, residential property is still showing significant capital appreciation relative to the Retail Price Index.
Property Types
On an annual basis there were price falls in all property categories. The sharpest fall was in detached bungalows, down 40.6% over the year to an average of £184,604.
The average price for semi-detached bungalows fell by 35.8% to £119,109 while apartments were down 34.5% to £139,637
Detached houses fell by 31.6% to £242,548; semi-detached houses fell by 28.2% to an average of £151,395; and terraced / townhouses fell by 26.3%to an average of £125,963.
On a quarterly basis, all property types recorded reduced average price levels in Quarter 1 2009 against the last quarter of 2008 with detached bungalows down 15.4%, semi-detached bungalows by 14.5%, apartments by 9.1%, terraced/townhouses by 6.6% and semi-detached houses by 8.9%. Detached houses performed better, with the average price falling by only 1.8% over the quarter.
Regional performance
A regional analysis showed a similar picture to the overall Northern Ireland market, characterised by significant rates of price decline and low volumes of sales. The thin evidence made interpretation difficult for some of the market areas, particularly in providing analysis by property type.
In Belfast the average price of housing at £155,483 showed a 38.8% annual decline, slightly higher than the average drop for Northern Ireland. All sectors of the market showed price drops with terraced/townhouses down by 33.6%, semi-detached houses by 36.2%; detached houses by 30% and apartments by 31.4%.
The highest priced city location was south Belfast, followed by the east, west and north of the city.
North Down’saverage house price of £177,785 represented a 29.1% fall over the year, below the Northern Ireland trend. All property types suffered falls over the year but over the quarter there were signs of optimism because the average declined by more modest 3.4% and semi-detached properties showed a marginal increase of 0.4% in the first quarter.
The average price in Lisburn dropped by 31.6% over the year to £175,799, with all property types suffering and apartments in particular falling by 42.3%. In the first quarter, the average rate of decline was 6.3%
In East Antrim the overall average of £133,258 represented an annual fall of 37%, slightly above that for Northern Ireland as a whole. All property categories saw decreases. The average decline in the first quarter was 9.9%.
In Antrim/Ballymena the overall average price fell at a lower pace than the overall market, with the average of £159,192 down by 15.4% over the year. Over the quarter, the decline was 10.2%.
For the Coleraine/Limavady/North Coast region the average price was down by 35.5% over a year to £170,224. However, there were signs of improvement from the quarterly performance, with the overall average price in the area up by 5% compared with the final quarter of 2008.
The market in Derry/Strabane again showed very low sales volumes. The overall average price of £149,952 reflected an annual fall of 31.5%. Over the quarter there were some tentative signs of improvement with an increase of 0.7% in the overall average price.
The overall average price for Mid-Ulster was £137,019, a drop of 31.8% over the year and of 7.1% compared to the final quarter of 2008. The impact of decreases was across all property types.
In Enniskillen/Fermanagh/South Tyrone the picture was similar to the overall market, with a drop of 30.3% over a year to an average of £159,611. Transaction volumes were low but there were signs that price levels may be starting to turn, with the average price relative to the final quarter of 2008 up by 17.5%.
For Craigavon/Armagh the overall average price declined by 23.7% to £131,703. Quarterly performance started to show a relative improvement with a couple of property types showing increases in average prices compared with the final quarter of 2008.
Mid & South Down, usually one of the most buoyant markets, suffered a drop in overall average price by 34.4% over the year to £170,139. There were some significant drops by property type with semi-detached houses, for instance, falling 32.9%. Over the quarter, the average price fall was only 3.5%.
Ends
Notes to Editors:
TABLES
Performance by Property Type
| Market sector | Annual change | Average Price |
| Terraced house | -26.3% | £125,963 |
| Semi-detached house | -28.2% | £151,395 |
| Detached house | -31.6% | £242,548 |
| Semi-detached bungalow | -35.8% | £119,109 |
| Detached bungalow | -40.6% | £184,604 |
| Apartment | -34.5% | £139,637 |
Average house price by region
| Location | Average Price |
| Northern Ireland -All | £156,857 |
| Belfast - All | £155,483 |
| North Belfast | £116,181 |
| South Belfast | £195,211 |
| East Belfast | £168,499 |
| West Belfast | £129,615 |
| North Down | £177,785 |
| Lisburn | £175,799 |
| East Antrim | £133,258 |
| L'derry/Strabane | £149,952 |
| Antrim/Ballymena | £159,192 |
| Coleraine/Limavady/N. Coast | £170,224 |
| Enniskillen/Fermanagh/S.Tyrone | £159,611 |
| Mid Ulster | £137,019 |
| Mid & South Down | £170,139 |
| Craigavon/Armagh | £131,703 |
Media contacts:
For University of Ulster: Trina Porter, Press Office, University of Ulster 02890
365131
For Bank of Ireland: Alan Watson, SMARTS +44 (0)28 9039 5500
Julie Sherlock, Bank of Ireland +44 (0)28 90433520
For NIHE: Imelda McGrath or Jim Murray 028 9031 8700
© Bank of Ireland 2012
