26/02/2020

Experts Confident As Housing Market Grows

Northern Ireland's housing market remains assured amid a period of sustained price increases, according to the latest industry figures.

While Brexit has provided clarity throughout the industry, the level of first time buying has dwindled in recent months, the latest Quarterly House Price Index from Ulster University have revealed.

The housing market is seeing continued annual and quarterly rises, however, with all but the apartment sector seeing growth.

The average house price stands at £178,800, which represents a growth of 7.8% between the end of 2018 and 2019.

When considering the quarterly movements, the index displays an increase of 2.8% relative to the third quarter of 2019.

Perceptions that the first time buyer market had dwindled, particularly in the higher-priced markets in Belfast and surrounding areas, were substantiated by the latest statistics.

The amount of properties sold at £150,000 or less was at around 50% in the last quarter of 2019, having declined steadily from almost three quarters (74%) in the latter half of 2013.

It's also believed that Brexit has provided some clarity on the general direction of travel.

However, uncertainty continues to surround a number of key issues for the market, notably future trading arrangements which remain a significant challenge for local businesses and the wider economy.

At a local level, the return to devolved government and publication of the New Decade, New Approach deal paves the way for legislation and policy development to address a range of issues that have become increasingly pressing for Northern Ireland over the last three years, notably the extension of bedroom tax mitigation and reclassification of housing associations (so that new social housing provision and the work of the Co-Ownership scheme can be maintained).

Dr Martin Hinch Research Associate in Performance & Analysis of Residential Property Markets at Ulster University, said the figures promote a positive outlook for the year ahead, as house prices reach their highest level since 2008.
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He said: "The market has shown resilience in the face of external economic and geopolitical challenges, and as we establish more stable government at both local and UK level, we can be optimistic about continued growth.

"Of course, there are still real challenges in relation to Brexit and trade negotiation outcomes for the longer term, however, Stormont's return and the UK's formal EU exit has at least alleviated some of the uncertainty we've experienced over the past three years."

Commenting on the report, Michael Boyd, Deputy Chief Executive and Finance Director, at Progressive Building Society said: "With the highest price growth since the beginning of 2018 the latest Northern Ireland Quarterly House Price Index confirms the strength of the housing market in Northern Ireland with an annual increase of 7.8% and a quarterly increase of 2.8%.

"While Q4 2019 was very fluid both economically and politically at a national level, the passing of October 31st without a cliff edge Brexit and the signing of the UK EU withdrawal agreement provided much needed stability at a local level.

"To build on the confidence and affordability within the market and maintain sustainable growth levels in 2020, further milestones such as the upcoming trade negotiations between the UK and the EU and the all-important ease of flow of goods and services for Northern Ireland businesses, needs to be carefully navigated."

Karly Greene, Head of Research at the Northern Ireland Housing Executive, which commissions the research, added: "The latest figures produced by Ulster University and the feedback from estate agents both indicate ongoing demand within the housing market. Following the UK general election, the UK's departure from the EU last month and the return of devolved government in Northern Ireland, some of the wider uncertainty influencing buyer and seller sentiment has been addressed, at least in the short term. There is no reason to expect an early downturn in demand and we will continue to monitor affordability indicators and market trends in the coming year."



(JG/MH)

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