Lack of supply driving up prices as housing market ‘stays resilient’
NORTHERN Ireland’s housing market is showing resilience despite economic uncertainty with lack of supply expected to push up prices, according to a key industry survey.
The monthly survey by the Royal Institution of Chartered Surveyors (RICS) said prices are continuing to rise — and at a stronger rate than any other UK region.
Its report comes the day after the separate property price index, which reports a 4% increase in the standardised price of a home to just under £140,000.
But the RICS survey, which is published with Ulster Bank, warned that sales activity is tepid, even though there had been a slight increase in inquiries from would-be buyers.
RICS warned that new instructions to sell have not risen for eight out of the past nine months due to caution from homeowners — posing a challenge for the market in future.
Its report said that members were pointing to Brexit uncertainty and news of next month’s general election as affecting the market, and the willingness of homeowners to make a move.
They also predicted a slowdown coming up to Christmas — though both first-time buyers and the new-build market continue to bring “buoyancy” to the market.
Looking ahead, surveyors were confident prices would still be increasing in a year’s time, making them more optimistic than their counterparts in Great Britain.
Samuel Dickey, RICS residential property spokesman in Northern Ireland, said: “New homes and first-time buyers continue to be strong contributing factors to the resilience of the NI housing market as a whole.
“The imbalance between supply and demand also continues to be the main driver of price growth.
“As we approach winter and the Christmas period, it is expected that resales activity will ease back, but I believe there is still significant latent demand in the market that could be realised in the new year. Overall, it is encouraging to see that there continues to be resilience in the market, despite all of the external challenges and noise, and it is noteworthy that Northern Ireland surveyors are more positive about the year ahead than elsewhere in the UK.”
Meanwhile, the house price index for July to September said that detached homes in Northern Ireland have seen the steepest rise in price of all house types over the last year to hit an average of around £210,000, according to a report.
And like the RICS report, it suggests that lack of supply will push up prices for homes of all kinds, after a 4% increase over in the last year. The government research into housing market activity over the third quarter said that there were 6,002 homes sold over the first nine months of the year.
However, that was down from 6,563 over the first nine months of last year. And there is a wide range of average prices across district council areas, from £120,110 for the cheapest location in Derry city and Strabane, to £164,900 for the most expensive area of Lisburn and Castlereagh.
Ulster Bank chief economist Richard Ramsey said that prices were still around 38% below their “freak peak” of 2007, which was followed by a prolonged property crash.