Home Buying More Affordable in Northern Ireland
24th February 2009
House prices throughout Northern Ireland have become more affordable. During the final quarter of 2008 there was a downward adjustment to average prices - the new price low of under £170,000 is one we would have expected reaching sometime later in 2009 but it has arrived sooner. The market overall is now back at mid 2006 levels, which is a positive move for those currently house hunting.
Arguably, the most telling statistics are that 1 in 2 properties are now selling at or less than £150,000 and only 1 in 10 at £250,000 or above
The region's journey back to affordable housing may not yet be complete but clearly we have now travelled a considerable distance. From its peak, average prices have now declined by over 30% and by considerably more in many new build cases
The key to a healthier market in 2009 and 2010, albeit against a recessionary backdrop, lies in a pick-up in completed sales. Much now rests on the shoulders of first-time buyers (many of whom were crowded out of the market and now, thankfully, spared the position of negative equity).
However, with 16% of properties in the latest survey selling below £100,000, the scope for further significant reductions in the new build and starter home segment of the market seems very limited.
Many are now at the point where house buying is affordable and attractive again, in the new ultra low interest rate environment. Some sources would indicate an increase in enquiries since the turn of the year and it is to be hoped these translate into purchases for recording in future surveys. For some, the missing ingredient is confidence, especially where employment prospects are less secure.
In time, we will look back on the period 2006-07 as an extraordinary period in Northern Ireland's economic history. There was general acceptance that the rate of price inflation was unsustainable but an uncertainty as to the adjustment process and how painful it might be - we now have experience of our first real property cycle and lessons will be learned.
To read full report Bank of Ireland Housing Survey
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